WestRock increases sales in Q2 of 2019

WestRock Company, Atlanta, announced results for its fiscal second quarter ended March 31, 2019. The company reports that net sales increased $603 million compared with the prior year quarter, primarily attributable to $599 million of increased corrugated packaging segment net sales (mainly due to the acquisition of KapStone Paper and Packaging Corporation), higher selling price/mix across the segment and strength in its North American container business. 

“Our WestRock team delivered outstanding results in the second fiscal quarter,” says Steve Voorhees, chief executive officer. “We’re responding to changing market conditions by focusing on organic growth opportunities, maintaining a focus on productivity, operational excellence and debt reduction, while continuing to return cash to stockholders. With the advantages of our diverse portfolio and the multiple levers in our control, I remain confident in our ability to create long-term value for our customers and for our stockholders.”

WestRock reports that the increased sales were partially offset by the absence of recycling sales in the current year quarter as a result of conducting the operations primarily as a procurement function beginning in fiscal 2019, lower containerboard volumes and unfavorable foreign currency compared with the prior year quarter. Net sales, adjusted to exclude recycling net sales in the prior year quarter for comparability, increased $713 million. 

Segment income increased $23 million compared with the prior year quarter primarily attributable to $48 million of increased corrugated packaging segment income, $16 million of decreased land and development segment income and $9 million of decreased consumer packaging segment income. The increase in segment income primarily included the contribution from acquired operations, higher selling price/mix across its segments and productivity. WestRock reports that these items were offset by higher levels of cost inflation, lower containerboard volumes, economic downtime, the scheduled strategic outage at the company’s Mahrt mill and lower land and development segment income due to winding down of sales.