North American flexible packaging firm TC Transcontinental has reported net earnings of $28.1m for the first quarter of fiscal 2019, compared to $58.2m for the same period last year.
TC Transcontinental said the 51.7% decrease in net earnings is due to reduced operating earnings and higher financial expenses in the first quarter of 2019 as a result of the increase in long-term debt related to the financing of the acquisition of Coveris Americas.
The company has posted 56.6% decrease in the operating earnings for the first quarter of 2019 at $53.6, compared to $123.6m for the same period last year.
TC Transcontinental has posted 49.8% increase in revenues for the first quarter of 2019 at $751.6m, compared to $501.7m for the same period last year.
The increase is due to accelerated recognition of deferred revenues of $39.8m in the first quarter of 2018 and the $19.5m unfavourable effect of the sale of the firm’s California newspaper printing operations resulting from the deal signed with Hearst.
According to the company, the acquisition of Coveris Americas will significantly contribute to adjusted revenues and adjusted operating earnings for the next quarter compared against the corresponding quarter of the prior year.
TC Transcontinental president and CEO François Olivier said: “I am satisfied with the revenue growth we experienced in the packaging sector in the first quarter of 2019.
“We remain committed to gradually improving our profit margins during the year, in particular by realizing the expected synergies related to the transformational acquisition of Coveris Americas.
“Our Printing Sector had a more moderate start, mainly as a result of the sale of our newspaper printing operations in California. Furthermore, while we saw a slight decrease in our revenues from our retailer-related service offering, it remains healthy and resilient.”
Claimed to be Canada’s largest printer, TC Transcontinental employs around 9,000 people, of which majority are based in Canada, the US, and Latin America.