Transcontinental Inc. announces its results for the first quarter of fiscal 2021

Highlights:
*Generated significant organic sales growth and improved profitability in the Packaging Sector, and maintained rigorous cost control in the Printing Sector.
*Revenues of $622.7 million for the quarter ended January 24, 2021; operating earnings of $47.2 million; and net earnings attributable to shareholders of the Corporation of $27.7 million ($0.32 per share).
*Adjusted operating earnings before depreciation and amortization(1) of $105.7 million for the quarter ended January 24, 2021; adjusted operating earnings(1) of $68.6 million; and adjusted net earnings attributable to shareholders of the Corporation(1) of $43.8 million ($0.50 per share).
*Maintained a solid financial position with liquidities of $182.0 million and access to unused lines of credit of $428.5 million, for total available liquidities of $610.5 million.
*Improved net indebtedness ratio(1) to 1.8x as a result of the decrease in net indebtedness of $45.9 million during the first quarter.
*Standard & Poor’s rating agency announced a favourable revision of Transcontinental’s credit rating, from BBB- / negative outlook to BBB- / stable outlook.
*Named to Corporate Knights’ 2021 Global 100 Most Sustainable Corporations in the World and included among the 50 corporations with the lowest ESG risk by Sustainalytics.

Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the first quarter of fiscal 2021, which ended January 24, 2021.

“I am very satisfied with our first quarter performance, which bodes well for fiscal 2021, said François Olivier, President and Chief Executive Officer of TC Transcontinental. Once again, these results attest to the relevance of our strategy, the resilience of our business model, our operational excellence as well as the responsible management of our operations as a whole.

“Our Packaging Sector, our main engine of growth, posted organic sales growth in the quarter that exceeded our expectations. This growth stems from customer demand, which remains robust, revenues from signed contracts and the introduction of new products on the market in the previous quarters. In addition, efficiency gains contributed to the improvement of the sector’s profitability compared to the prior year. To fuel our organic sales growth, we continue to invest in research and development, mainly in sustainable packaging that contributes to the circular economy for plastics. In fact, we are proud that our compostable packaging for Maxwell House Canada’s coffee pods has recently been recognized by the Packaging Association of Canada for its best in class sustainable design.

“Our Printing Sector continued to demonstrate its resilience as the operations of several of our customers are still affected by the pandemic. Our cost reduction measures enabled us to continue to generate a solid operating margin as well as significant cash flows. While we remain cautious about the evolution of COVID-19 and the restrictions implemented to control its spread, we believe that we will be able to gradually increase printing volumes in the coming quarters. Finally, our Media Sector continued to deliver excellent results.

“To conclude, our first quarter performance and our solid financial position give us the momentum and the capacity to confidently pursue our investment strategy focused on organic sales growth as well as strategic and targeted acquisitions.”

2021 First Quarter Results
Revenues decreased by $83.1 million, or 11.8%, from $705.8 million in the first quarter of 2020 to $622.7 million in the corresponding period of 2021. This decline is mainly attributable to lower volume in the Printing Sector due to the impact of the COVID-19 pandemic and the sale of the paper packaging operations, which occurred toward the end of the first quarter of the previous year. This decrease was partially mitigated by the solid organic growth in revenues in the Packaging Sector and the revenues generated by the acquisition of Artisan Complete Limited in the Printing Sector.

Operating earnings increased by $6.4 million, or 15.7%, from $40.8 million in the first quarter of 2020 to $47.2 million in the first quarter of 2021. The increase in operating earnings is explained by the organic growth in the Packaging Sector. In addition, in the Printing Sector, initiatives to optimize operational efficiency and the Canada Emergency Wage Subsidy offset a majority of the decrease in volume.

Net earnings attributable to shareholders of the Corporation increased by $21.3 million, from $6.4 million in the first quarter of 2020 to $27.7 million in the first quarter of 2021. This increase is mostly explained by the income tax expense related to the sale of the paper packaging operations in the first quarter of 2020, higher operating earnings and the decrease in net financial expenses resulting from a reduction in net indebtedness and a lower weighted average interest rate. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.07 to $0.32.
details at: https://tctranscontinental.com/en-us/company-overview/news-room/press-releases/transcontinental-inc-announces-its-results-first-1

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