Lake Forest, Illinois-based Packaging Corp. of America (PCA) has reported full-year 2019 net income of $696 million, down 4.1 percent from $726 million in 2018. The paper and board producer’s fourth-quarter net income of $136 million was down from nearly $205 million in the fourth quarter of 2018.
“We continued to run our containerboard system to demand in a very cost-effective manner,” says PCA Chair and CEO Mark W. Kowlzan of the company’s 2019 performance. “Our mill production supplied the necessary containerboard to achieve a new all-time quarterly record for box shipments per day and a new fourth-quarter record for total box shipments, allowing us to maintain our industry-leading integration rate.”
The company’s 2019 net sales figure of nearly $7 billion was down just 0.7 percent from a similar figure in 2018.
Adds Kowlzan, “Our new box plant in Richland, Washington, had an excellent startup during the quarter, and we are now beginning to take full advantage of the benefits from our machine conversion at the Wallula [Washington containerboard] mill.”
He continues, “In our Paper segment, we also ran our system to demand, however, we had solid volume which came in better than anticipated [in the fourth quarter], and we reduced our office paper inventory by almost 10 percent compared to the third quarter of 2019. Prices and mix were lower as expected, but also slightly better than anticipated. Our paper mills operated very well with great cost control throughout the quarter.”
Looking ahead to the first quarter of 2020, Kowlzan states, “In our Packaging segment we expect lower prices as the remaining impact of the published domestic containerboard price decreases from last year work through our system, as well as the negative impact from the recent January decreases in the published prices for linerboard and medium. We also expect lower export prices.”
Scheduled PCA containerboard mill outages also will be a factor, says the CEO, “but we do expect higher corrugated products shipments.”