CHARLOTTE - Nonwovens manufacturer Glatfelter says it is seeing the benefits of its turnaround strategy with a 12% increase in net sales for its fourth quarter.
Operating income for its Airlaid Materials business was up 19% in the quarter while the Composite Fibers arm saw an 8% compared to Q4 2021. Spunlace, which included a full quarter of income for the first time, delivered a US$3.4 million improvement in operating income over the third quarter of 2022.
Adjusted loss for the period was $6.9 million, down from a adjusted earnings of $1.6 million.
Announcing the results, Thomas Fahnemann, president and chief executive officer of Glatfelter said the company was making good progress with delivering against its turnaround strategy, and it was seeing early signs of this in its fourth quarter as it realized approximately $4 million in benefits from these initiatives. "As demonstrated by the improved performance of the Spunlace segment this quarter, we are making targeted operational improvements to execute more effectively in order to continue delivering the quality products our customers expect from Glatfelter, while also progressing our pricing initiatives in the Sontara product category,” he said. "Our focus on profitability and prudent inventory management, along with seasonal shifts in order patterns and pockets of slower demand, had an anticipated temporary impact on volumes in Airlaid Materials and Composite Fibres.
"All aspects of our business continued to be impacted by macroeconomic challenges related to energy and raw material inflation. However, more aggressive pricing actions to recover this inflation resulted in meaningful progress in closing the price-cost gap."
Airlaid Materials’ net sales increased $13.0 million in the year-over-year comparison mainly driven by higher selling prices from cost-pass-through arrangements with customers and pricing actions to recover significant inflation in raw materials and energy. Shipments were 5.4% lower mainly due to wipes and feminine hygiene categories.
Airlaid Materials’ fourth quarter operating income of $14.1 million was $2.2 million higher when compared to the fourth quarter of 2021.
Composite Fibers’ revenue was slightly higher in the fourth quarter of 2022, compared to the year-ago quarter as higher selling prices of $18.8 million were mostly offset by lower shipments of 16.8%. Wallcover shipments were 26% below prior year from the continued impact of lower shipments to customers in Russia and Ukraine due to the ongoing conflict in the region, including sanctions prohibiting the sale of certain wallcover into Russia. Food and beverage shipments were up 3%, but all other product categories were reflecting softening demand from inflationary pressures.
Composite Fibers had operating income for the fourth quarter of $4.8 million compared with $4.5 million operating income in the fourth quarter of 2021.
Spunlace had an operating loss of $1.2 million in the fourth quarter of this year compared with a loss of $1.3 million for the period under Glatfelter ownership last year beginning October 29, 2021. Shipments for the fourth quarter were approximately 20% higher compared to fourth quarter of last year due to one additional month of shipments.
