Atlanta-based WestRock Co. reports that it achieved record revenue levels in the third quarter of its fiscal year, which ended June 30. Net sales were at $4.8 billion in the third quarter, up 14 percent compared with the third quarter of 2020. Net income was at $250 million in the third quarter of the year, up 40 percent compared with $179 million in the third quarter of 2020.
WestRock reports that its adjusted segment earnings before interest, taxes, depreciation and amortization (EBITDA) was at $811 million in the third quarter of the year, up 15 percent compared with $708 million in the third quarter of 2020. The company also generated net cash provided by operating activities of $751 million and adjusted free cash flow of $554 million in the quarter compared with $740 million and $508 million, respectively, in the third quarter of 2020. WestRock says it reduced its total debt by $270 million in the quarter and adjusted net debt by $482 million.
According to the company’s third-quarter earnings presentation Aug. 5, packaging sales were up 15 percent in the third quarter compared with the same time frame in 2020.
“Demand continued to be strong in the key markets we serve, including e-commerce, food, beverage and industrial,” said David Sewell, chief executive officer at WestRock, during the company’s earnings presentation. “North American per day box shipments were up 9 percent year over year. We are implementing the previously published price increases across our major paper grades. These pricing gains, combined with our volume growth and mix improvements, outpaced inflation and drove 15 percent adjusted EBITDA growth year over year and adjusted EBITDA margins of 16.8 percent.”
Ward Dickson, chief financial officer at WestRock, reported during the earnings presentation that the company’s corrugated box shipments increased 3 percent sequentially in the third quarter of the year. He added that sequential cost inflation was driven by higher recovered fiber costs, up $22 per ton compared with the second quarter of the year, along with increased transportation, energy and chemical costs. He said, “Corrugated packaging, pricing and mix outpaced inflation by $89 million from Q2 to Q3. Inventory levels remained low as we came out of our peak mill outage quarter. We have only 11,000 tons of planned maintenance outage downtime in the fourth quarter.”
Sewell concludes, “We saw strong demand for our products and solutions across our targeted end markets, and pricing gains outpaced inflation in the quarter. It was another quarter of strong cash flows, and we executed our capital allocation priorities, enabling us to approach our targeted net leverage range ahead of expectations. Looking forward, we remain well-positioned for success and are committed to accelerating the opportunities we see across our differentiated portfolio, innovating to develop new sustainable, fiber-based packaging solutions and driving productivity to generate improved returns.”