KP Tissue Reports Strong Q3 Earnings and Future Plans

KP Tissue ((TSE:KPT)) has held its Q3 earnings call. Read on for the main highlights of the call.

KP Tissue’s recent earnings call conveyed a generally positive sentiment, highlighting a strong financial performance characterized by significant growth in adjusted EBITDA and revenue. The company successfully reduced its debt and received recognition for its sustainability efforts. However, concerns were raised regarding a decrease in net income and higher operating costs. The announcement of a new tissue plant suggests promising future growth potential.

Strong Financial Performance

KP Tissue reported a remarkable increase in adjusted EBITDA by 30.4% year-over-year, reaching $85.7 million, driven by revenue of $561.1 million. This nearly 8% revenue growth was attributed to higher sales volume, favorable selling prices, and a positive foreign exchange impact.

Consumer Business Growth

The company experienced notable consumer share gains in the paper towel and facial tissue categories. U.S. sales grew by 8.8% year-over-year, while Kruger Products branded market share in Canada showed strong growth in the paper towel category.

Successful Debt Reduction

KP Tissue successfully reduced its net debt by $87.9 million, improving the leverage ratio from 4.0x to 3.4x since Q2 2025, showcasing effective financial management.

Recognition for Sustainability

The Bonterra brand was recognized as the most sustainable brand in Canada in 2025 by Kantar BrandZ, reflecting KP Tissue’s strong commitment to sustainability efforts.

New Tissue Plant Announcement

KP Tissue announced plans to construct a new state-of-the-art tissue plant in the Western United States, scheduled to start operations in 2028. This facility aims to enhance serving capabilities for the U.S. market.

Decreased Net Income

Despite the positive financial performance, net income decreased to $14.6 million in Q3 2025 from $18 million in Q3 2024. This decline was due to an FX loss variation, higher income tax expenses, depreciation, and increased interest and other finance costs.

Higher Operating Costs

The increase in adjusted EBITDA was partially offset by higher manufacturing overhead costs, elevated warehousing costs, and increased SG&A expenses, which remain a concern for the company.

Forward-Looking Guidance

Looking ahead, KP Tissue anticipates maintaining strong financial results, supported by cost efficiencies achieved through lower pulp prices and reduced freight expenses. The company plans to enhance its production capacity by approximately 75,000 metric tons annually with the new tissue plant in the Western U.S., expected to be operational by 2028.

In summary, KP Tissue’s earnings call reflected a strong financial performance with significant growth in adjusted EBITDA and revenue. While the company successfully reduced its debt and gained recognition for sustainability, challenges such as decreased net income and higher operating costs were noted. The announcement of a new tissue plant indicates a positive outlook for future growth.