KP Tissue (KPT) Q2 2026 earnings summary

Executive summary

• Revenue increased 2.8% year-over-year to CAD 550.9 million in Q2 2026, driven by higher U.S. Consumer and AFH sales volumes, while Canadian Consumer volume declined due to market softness and consumer trade-down.

• Adjusted EBITDA rose 25% year-over-year to CAD 90.6 million, reflecting improved mill performance, higher U.S. sales, and lower pulp prices, despite elevated freight and SG&A costs.

• Net income was CAD 22.1 million, flat compared to Q2 2025, with a net income margin of 4.0%.

• Production rates and safety performance exceeded expectations, with the Memphis converting line ramping up ahead of plan.

• A quarterly dividend of $0.21 per share was declared, payable October 15, 2026.

Financial highlights

• Revenue increased by CAD 14.8 million year-over-year and CAD 6.3 million sequentially, with U.S. revenue up 9.5% and Canadian revenue down 2.6%.

• Adjusted EBITDA margin improved to 16.4% from 13.5% a year ago.

• Gross profit rose 49.9% year-over-year to CAD 110.8 million, with gross margin at 20.1%.

• Operating income more than doubled to CAD 59.3 million from CAD 23.0 million in Q2 2025.

• Net debt increased to CAD 998.3 million, with leverage stable at 2.9x LTM Adjusted EBITDA.

Outlook and guidance

• Adjusted EBITDA for Q3 2026 is expected to be in line with Q2 2026 results.

• Ongoing market softness anticipated in Canada, with a share recovery plan and continued brand investment expected to improve performance.

• Progress continues on securing a new TAD facility location in the western U.S.; decision delayed due to greenfield site complexities and economic uncertainty.

• Anticipating CAD 90 million–CAD 110 million in 2026 CAPEX, focused on strategic projects including U.S. TAD expansion.

• Industry analysts expect pulp prices to trend upward in late 2026 or early 2027, with BEK rising faster than NBSK.