Transcontinental Q1 profit down, revenue up after Coveris packaging acquisition

MONTREAL – Transcontinental Inc. reports it had a lower profit but higher revenues in the first quarter of fiscal 2019, compared with a year earlier before it undertook a major acquisition.

The Montreal-based printing company — which has been increasing its focus on product packaging in recent years — says it had $28.1 million or 32 cents per share of net income for the three months ended Jan. 27.

That’s less than half Transcontinental’s net income of $58.2 million, or 75 cents per share, in 2018’s first-quarter.

The company attributed the decline primarily to higher debt costs and financial expenses related to acquisition and restructuring, as well as lower operating earnings from its legacy printing business.

Transcontinental’s adjusted net earnings, which exclude some expenses related to the $1.72-billion Coveris acquisition, were down a more modest 12.2 per cent to $45.5 million from $51.8 million.

Meanwhile, the company’s revenue rose 49.8 per cent to $751.6 million, from $501.7 million, mostly because of $306.0 million in revenue contributions from Coveris Americas.

Companies in this story: (TSX: TCL.A TCL.B)