YORK - A strong performance from the home care and health and hygiene products at its airlaid division could not prevent Glatfelter slipping to a loss in its most recent quarter.
The company posted a loss of US$2.4 million, down from a profit of $5.8 million in the same period last year following the impact of the coronavirus. Consolidated net sales were $216.2 million, down from $235.1 million.
Airlaid Materials’ net sales decreased $8.4 million in the year-over-year comparison. Shipments were lower by 2.2% due to weak demand for tabletop products as restaurants globally were closed or operated at dramatically limited capacity. This shortfall in demand was mostly offset by strong orders for home care and health and hygiene products.
However, Airlaid Materials’ second quarter 2020 operating income of $12.3 million was approximately 19% higher, when compared to the second quarter of 2019. An improved sales mix favourably impacted results by $0.6 million, while price declines were more than offset by lower raw material and energy prices, adding net $0.5 million of profit.
“Glatfelter’s solid second quarter results, in the midst of a global pandemic, demonstrate the resiliency of our new business model and continued demand for our portfolio of engineered materials that are essential for producing a variety of consumer staples,” said Dante C. Parrini, Chairman and chief executive officer. “Composite Fibers outperformed expectations for the quarter, due in part to strong shipments in the food and beverage category and better than expected demand for wallcover products. Profitability for this segment relative to guidance was also better than expected, driven by lower downtime and continued cost control.”
"In Airlaid Materials, we saw exceptional growth in home care and health and hygiene products, although overall shipments for the segment were hampered by the pandemic’s impact on tabletop demand as restaurants around the globe were either closed or operating at dramatically reduced capacity. Despite this headwind on volumes, Airlaid Materials achieved record quarterly EBITDA with margin of 19%.”
Mr. Parrini added: “I am proud of how Glatfelter people are responding to the challenges related to COVID-19 and are successfully continuing to operate globally while keeping our workforce safe. Glatfelter’s ongoing transformation into a more agile and cost- effective business, coupled with a portfolio of essential consumer staples, have enabled us to optimize performance in this unprecedented and volatile year.”
