(Montreal) TC Transcontinental closes its recycling plant in Montreal. The printer and packager plans to tighten its belt at a time when demand is under pressure.
The Montreal company plans to undertake an “ambitious” cost reduction program in order to find between 20 million and 40 million in recurring savings over two years. It also hopes to make 100 million from the sale of assets.
“We all agree that we must do better to generate greater profitability,” said President and CEO Thomas Morin during a conference call on Wednesday to discuss more recent results. quarterly. We need to get better returns on what we already have. »
Management did not mention how many employees were affected by the closure of the Montreal establishment. It was not possible to obtain immediate details from the company, contacted earlier in the morning.
In June 2020, Transcontinental acquired the assets of Enviroplast, a flexible plastic recycling company in Anjou, for an amount of 2.4 million.
In addition to closing the Montreal plant, the company also announced that it will close a packaging plant in Wisconsin in February. She also sold a building located in Quebec for an amount of 12 million.
Transcontinental faces a series of headwinds as the rising cost of living weighs on demand in the packaging segment and the printing sector experiences a structural decline.
Results above expectations
Despite the difficult context, Transcontinental published results better than analysts’ forecasts for its fourth quarter ended October 31, thanks to profit margins higher than expectations.
The company posted a net profit of 41.7 million, which represents a decrease of 18.7 million compared to last year. Adjusted diluted earnings per share were 83 cents. Revenues, for their part, declined by 2.8% to 779.7 million.
Before the results were released, analysts expected earnings per share of 64 cents and revenue of 788.5 million, according to financial data firm Refinitiv.
Transcontinental shares gained 38 cents, or 3.37%, to $11.64 in the morning on the Toronto Stock Exchange.
Company in this dispatch: (TSX: TCL. A)