KP Tissue (KPT) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached CAD 546.1 million, up 13.9% year-over-year, driven by higher Consumer and AFH segment sales, improved pricing, and favorable FX impact.

• Adjusted EBITDA rose 12.9% to CAD 75.8 million, with net income at CAD 15.4 million, up from CAD 9.0 million in Q1 2024.

• U.S. revenue grew 21.7% year-over-year; Canadian revenue increased 7.6%.

• Production rates and new assets, including the Sherbrooke LDC paper machine and facial tissue line, exceeded start-up expectations.

• Continued investments in brand campaigns, sustainability initiatives, and community programs.

Financial highlights

• Q1 2025 revenue: CAD 546.1 million, up 13.9% year-over-year; Adjusted EBITDA: CAD 75.8 million, up 12.9%; net income: CAD 15.4 million, up from CAD 9.0 million in Q1 2024.

• Consumer segment revenue grew 15.1% to CAD 465.2 million; AFH revenue up 7.7% to CAD 80.9 million.

• Adjusted EBITDA margin at 13.9%; gross margin at 17.4%.

• Net debt-to-EBITDA ratio improved to 4.0x from 4.2x in Q4 2024.

• Cash position at quarter end: CAD 141.8 million; total liquidity: CAD 356.8 million.

Outlook and guidance

• Q2 2025 Adjusted EBITDA expected in the range of CAD 70–75 million, assuming similar tariff conditions.

• Anticipate continued sales growth and margin management throughout 2025, with Sherbrooke LDC paper machine set to improve AFH profitability.

• CapEx for 2025 projected at CAD 80–100 million, with over CAD 20 million remaining for Sherbrooke expansion.

• Management monitoring tariff impacts and has contingency plans to mitigate financial risk.