IPL Plastics suffered a $2.6 million (€2.3 million) loss in the second quarter of 2018, the three months ending June 30, its financial update shows.
The group, who released its trading update today (Tuesday 14 August), suffered the loss against a net income of $10.9 million the previous year.
The report said that the net loss was primarily attributable to one-time costs associated with it’s Initial Public Offering (“the Offering”) on the Toronto Stock Exchange.
The company completed its Offering on the Toronto Stock Exchange on 28th June and managed to raise C$191.7 million (€123 million) from its launch.
A Significant Step
Despite the spike in costs, IPL chief Alan Walsh believes it to be a “significant step in the development and growth of our company”.
“We believe we are well positioned to fulfil our vision of becoming a leading global sustainable packaging solutions provider. Our strong positioning is evident in our second quarter results, in which we generated 34.7% revenue growth and 9.8% Adjusted EBITDA growth compared to the second quarter of 2017,” he said.
“We have also reduced net debt significantly through funds raised in the Offering. We believe the strength of our best-in-class customer service, superior and responsive manufacturing, industry-leading product development capabilities and innovative and value-added product offerings will support continued growth.”
The group repaid $494.3 million in debt back to the Bank of Ireland and the National Bank Financial in Canada during the second quarter.
Adjusted EBITDA increased 9.8% to $22.8 million in the quarter, driven by higher revenue and a full quarter contribution from the Returnable Packaging Solutions (“RPS”) division which followed the acquisition of Macro.
Adjusted EBITDA margins fell by 290 basis points to 12.8%. The group said this was due to increased costs of raw materials, transport, and labour.
The group said with these factors continuing to impact its costs, it expects similar pressure on its gross margin in the second half of 2018.
‘Notwithstanding these input cost pressures, some of which are cyclical, we believe that as resin prices stabilise we will be able to realign our cost of sales to return our business margins to normalised profitability levels,’ the report read.
The group expects to incur total cash outflow of approximately $52.5 million for the 2018 fiscal year.
It added that it will continue to consider ‘complementary acquisitions that make sound strategic sense’, so long as they fit within the group’s ‘disciplined’ parameters and that appeal to shareholders.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.