US producer of kraft paper and corrugated products KapStone has reported a 45% increase in consolidated net sales to $299.8m in the first quarter of 2012, up from $206.7m in the same period in 2011.
The increase was primarily due to the US Corrugated (USC) acquisition in October 2011, which included a 240,000t recycled containerboard paper mill in Cowpens, South Carolina, and 14 converting facilities in the eastern and mid-western US, as well as from increased volume from the company's legacy operations.
According to KapStone, the acquisition added 1.5 billion cubic feet of corrugated product sales in the first quarter of 2012 compared to zero in the previous year.
The company's operating income for the quarter was $27.5m, an increase of 8% or $2m compared to the first quarter in 2011. During the quarter, the company sold 330,000t of paper compared to 323,000t last year.
KapStone's capital expenditures for the quarter totalled $10.9m, and the company estimates $60m of capital expenditures for the financial year of 2012.
KapStone chairman and chief executive officer Roger Stone said the company's mills produced 396,000t of paper, and production at its two legacy mills was 3% higher year-on-year, benefiting from various productivity programmes and strategic capital investments.
"Our USC acquisition also performed well and added $10 million in adjusted EBITDA. Average selling prices of $608 per ton decreased by $10 per ton compared to the first quarter of 2011, reflecting softness in export containerboard markets," Stone added.
KapStone is the parent company of KapStone Kraft Paper and KapStone Container, which includes three paper mills and 14 converting plants across the eastern and midwestern US.