Highlights:
*Return to growth and significant increase in profitability in the Printing Sector, as well as solid performance in the Packaging and Media Sectors.
*Revenues of $623.3 million for the quarter ended April 25, 2021; operating earnings of $55.9 million; and net earnings attributable to shareholders of the Corporation of $35.6 million ($0.41 per share).
*Adjusted operating earnings before depreciation and amortization(1) of $107.0 million for the quarter ended April 25, 2021; adjusted operating earnings(1) of $72.6 million; and adjusted net earnings attributable to shareholders of the Corporation(1) of $47.8 million ($0.55 per share).
*Maintained a solid financial position with a net indebtedness ratio(1) of 1.7x.
*Favourable credit rating revision by DBRS Morningstar rating agency, from BBB (low) / negative outlook to BBB (low) / stable outlook.
*Acquired BGI Retail Inc. on June 1, 2021 and expanded the in-store marketing solutions offering to retailers.
*Winner of the Flexographic Technical Association (FTA) Innovations in Sustainability Award for the IntegrititeTM post-consumer recycled film.
“We continued to generate very good results, with solid performance in our three sectors and a return to growth in our Printing Sector, said François Olivier, President and Chief Executive Officer of TC Transcontinental. I am very grateful to all our employees for their continued efforts and resilience in the face of the challenges brought by the pandemic.
“In our Packaging Sector, our main engine of long-term growth, customer demand remains robust. With the introduction of new products on the market, the recently signed contracts and the momentum of our sustainable packaging products that contribute to the circular economy for plastic, we are confident in our ability to fuel organic growth in revenues in the coming quarters. Excluding the unfavourable effects of the significant and rapid rise in the price of resin and the exchange rate variation, the sector posted an excellent quarter with a significant increase in operating earnings.
“Our Printing Sector had an excellent quarter with positive organic growth, a first since the beginning of the pandemic. In addition to this growth, the sector posted a 25% increase in adjusted operating earnings before depreciation and amortization. The BGI Retail acquisition, which is highly complementary, enables us to further expand our in-store marketing solutions offering to retailers and, combined with the recently announced new revenues, increases the proportion of our growth activities in the sector. While we remain cautious about the evolution of the COVID-19 pandemic, we are encouraged by its slowdown and continue to expect an increase in printing volumes in the coming quarters. Finally, our Media Sector continued to deliver excellent results and significantly increased its revenues and profitability.
“To conclude, our performance and our solid financial position give us the momentum and the capacity to confidently pursue our growth objectives.”
2021 Second Quarter Results
Revenues decreased by $1.8 million, or 0.3%, from $625.1 million in the second quarter of 2020 to $623.3 million in the corresponding period of 2021. This decline is mainly due to the negative impact of the exchange rate variation on the Packaging Sector, mostly offset by organic growth in the three sectors.
Operating earnings increased by $11.8 million, or 26.8%, from $44.1 million in the second quarter of 2020 to $55.9 million in the second quarter of 2021. The increase in operating earnings is explained by the reduction in restructuring and other costs as well as operational efficiency initiatives.
In the Packaging Sector, adjusted operating earnings decreased by $7.0 million, from $38.2 million in the second quarter of 2020 to $31.2 million in the second quarter of 2021. This decrease is mainly due to the unfavourable impact of the significant and rapid rise in the price of resin as well as the unfavourable exchange rate effect. Excluding these two negative items, the sector posted strong growth in operating earnings due to the solid performance of segments related to food and everyday consumer goods packaging.
In the Printing Sector, adjusted operating earnings increased by $14.1 million, or 35.8%, from $39.4 million in second quarter of 2020 to $53.5 million in the second quarter of 2021. This increase is mainly attributable to the solid performance by most of the groups and cost reduction initiatives undertaken by the sector. The Canada Emergency Wage Subsidy was similar to last year and did not have a significant effect on the change in the sector’s organic growth.
Net earnings attributable to shareholders of the Corporation increased by $9.9 million, from $25.7 million in the second quarter of 2020 to $35.6 million in the second quarter of 2021.This increase is mostly explained by higher operating earnings and lower net financial expenses compared to the corresponding period of the prior year resulting from a reduction in net indebtedness and a lower weighted average interest rate.
more detail at: https://tctranscontinental.com/en-us/company-overview/news-room/press-releases/transcontinental-inc-announces-its-results-second-2