US' Glatfelter's adjusted EBITDA climbs by $8.3 mn in Q2 FY24

“During the second quarter we grew EBITDA by over $8 million compared to the prior-year quarter and delivered strong year-over-year gains for our spunlace and composite fibre segments,” said Thomas Fahnemann, president & CEO of Glatfelter. “In Spunlace, we continued to build upon our recent quarterly earnings momentum, generating $5.6 million in EBITDA during the second quarter, an increase of $3.4 million compared to prior year Q2. We have now repositioned this segment for continued growth and I am confident our turnaround efforts have created sustainable earnings that will allow spunlace to contribute to the new organisation post-merger.”

Composite fibres’ net sales were $8.5 million lower in the second quarter of 2024, compared to the year-ago quarter due to lower selling prices of $7.5 million. Shipments were higher 3.1 per cent largely driven by the composite laminates and food and beverage categories. Currency translation was unfavourable by $1.3 million.

Composite fibres had EBITDA for the second quarter of $9.7 million compared with $4.8 million EBITDA in the second quarter of 2023. Price-cost gap continued to trend positive this quarter as the decrease in input prices paid for raw materials, energy, freight, and packaging were more favourable than selling price declines, resulting in earnings improvement of $0.9 million. Shipments were higher primarily in the food and beverage and composite laminate categories and overall improved income by $2.2 million. Operations were favourable by $1.7 million, mainly driven by higher inclined wire production. The impact of currency and related hedging positively impacted earnings by $0.1 million.

Spunlace's net sales were $2.8 million higher in the second quarter of 2024 compared to the year-ago quarter, mainly driven by higher year-over-year shipments of 4.9 per cent, but partially offset by lower selling prices of $2.2 million due to cost pass-through arrangements. Currency translation was slightly unfavourable by $0.3 million.

Spunlace EBITDA was higher by $3.4 million compared to the same period last year. Lower selling prices and energy surcharges were more than offset by lower raw material and energy costs, resulting in earnings improvement of $1.9 million. Higher shipments improved operating income by approximately $0.8 million. Operations were favourable by $1.1 million mainly driven by higher production to meet customer demand. Currency negatively impacted earnings by $0.4 million.

“The European markets and consumer demand still pose a challenge to our business. Composite fibres delivered ~$5 million of EBITDA growth over the prior year and this segment is poised to benefit from recent pricing actions aimed at offsetting continued inflation. In Airlaid Materials, although earnings were lower year-over-year, we remain focused on optimizing product mix and improving price-cost gap to effectively manage the segment's ongoing profitability,” Fahnemann explained.

“Overall, our results are trending in the right direction relative to twelve months ago. Despite continued volatile market conditions, I remain confident in our ability to deliver on our earnings growth for the year. As we advance the work to complete our merger with Berry’s HHNF business, we remain focused on serving our customers and leveraging the benefits from the investments we made throughout our business over the past 18 months to create value for all Glatfelter stakeholders,” added Fahnemann.

“In August 2024, we reached a settlement in principle of a legal dispute with a manufacturer for equipment supplied and installed at our former specialty papers business. Under the terms of the sale agreement of our specialty papers business in 2018, we retained the right to any recoveries from the resolution of this matter. Under the terms of this settlement, we will be paid $6.5 million in monthly instalments of approximately $1.1 million beginning in September 2024. We expect to recognise a $6.5 million gain, less applicable legal fees, in the quarter ended September 30, 2024, which will be included in discontinued operations,” the company said in a press release.

Fibre2Fashion News Desk (RR)