WestRock Q1 sales up from a year ago

The paper and packaging producer reports that sales increased in both its Paper segment and Packaging segment in the first quarter of the year compared with one year ago.

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WestRock Co., an Atlanta-based provider of sustainable paper and packaging solutions, has achieved first-quarter 2022 net sales of $5 billion, which the company says is a 12.5 percent increase compared with the first quarter of 2021. The first quarter of 2022 ended Dec. 31, 2021.

The company also achieved net income of $182 million in the first quarter of 2022, up 19.9 percent from the first quarter of 2021, as well as consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) of $680 million for the quarter, up 1.6 percent year over year.

“I am pleased with our strong performance during the first quarter of fiscal 2022, in which our teams delivered record first-quarter sales and double-digit [earnings per share] growth while navigating the continued and unpredictable macroeconomic landscape,” says David B. Sewell, chief executive officer of WestRock. “We also delivered solid margin performance in the face of continued supply chain disruption, higher inflation and increased absenteeism associated with COVID-19.”

WestRock reorganized its segments for fiscal 2022 to include Corrugated Packaging, which includes the company’s corrugated converting operations; Consumer Packaging, which includes the company’s integrated consumer converting operations; Paper, which includes third-party paper sales; and Distribution, which includes the company’s distribution and display assembly operations. When compared with the first quarter of 2021, Paper segment sales increased $262 million in the quarter, Corrugated Packaging segment sales increased $201 million in the quarter, Consumer Packaging segment sales increased $76 million and Distribution segment sales increased $21 million. Nonallocated expenses also declined by $4 million in the first quarter of the year, according to the company’s first-quarter 2022 earnings report.

WestRock reports that its Corrugated Packaging segment adjusted EBITDA decreased $59 million, or 16.9 percent, in the first quarter of the year compared with the first quarter of 2021 primarily due to higher net cost inflation, reduction in productivity, increased maintenance outages and lower volumes that were partially offset by the margin impact from higher selling price and mix.

According to WestRock’s latest earnings report, the company’s Paper segment adjusted EBITDA increased $81 million in the first quarter of the year compared with the same time frame in 2021, up 53.2 percent mostly due to higher selling price and mix, increased productivity, increased maintenance outages and higher volumes that were partially offset by net cost inflation.

During the company’s earnings call Feb. 3, WestRock reported that its Packaging segment sales rose 10 percent in the first quarter of the year compared with the first quarter of 2021, while its Paper segment sales rose 24 percent in the first quarter compared with the first quarter of 2021.

Looking ahead to the upcoming quarters, Sewell says the company plans to continue to act on its transformation program, which was part of the company’s reorganization of its operating segments. He says the company also has hired Alex Pease as its new chief financial officer and Peter Anderson as its new chief supply chain officer. He says both Pease and Anderson “bring deep experience and fresh perspective to these critical roles.”

During the company’s earnings call, Pease reported that WestRock plans to continue to implement previously published price increases to containerboard, kraft paper, coated recycled board and unbleached recycled board. He said the company still has about 128,000 tons of scheduled maintenance downtime in the upcoming months. He added that he expects inflation to be flat in the upcoming quarter due to lower old corrugated container and energy costs, though he said freight and wage costs are expected to remain high.  

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