- Intertape Polymer Group (TSX:ITP) has released a cautious 2020 outlook, with management unsure of COVID-19’s future effects
- The company has reduced capital expenditure estimations in an effort to safeguard its financial position
- Intertape Polymer Group has broadened its 2020 revenue expectations, forecasting them to be between C$1.58 billion and $1.67 billion
- The company also announced a dividend of $0.1475 per share, payable on March 31
- Intertape Polymer Group (ITP) is currently up 2.86 per cent to $9.35 per share
Intertape Polymer Group (TSX:ITP) has released a cautious 2020 outlook, with management still unsure of COVID-19’s future effects.
The paper, film, and tape-based company, headquartered in Montreal, has 3,700 employees in 31 locations around the world.
Revenue for the year ending December 31, 2019 was up 10 per cent to roughly C$1.61 billion, due primarily to acquisitions of Polyair, Maiweave, and Airtrax.
Gross margins were also up from 20.8 per cent to 21.3 per cent.
However, net earnings fell $7.65 million to $57.29 million. Intertape Polymer cited a number of reasons for the dip, including increasing interest expense and income tax.
Greg Yull, President and CEO of Intertape Polymer Group, noted that key investments in water-activated tapes and films played a key role in the year’s results.
“Adjusted EBITDA growth of more than 22 per cent outpaced our top-line growth as margins improved as a result of effective management of the spread between selling prices and raw material costs.
“Our focus in 2020 is continued growth in free cash flow driven by growing with our e-commerce accounts, filling up the capacity in our greenfield investments and continuing to integrate our recent acquisitions, including our newest acquisition Nortech,” he said.
Despite the reasonably stable 2019 results, management has decided to cut capital expenditure plans for 2020, in order to safeguard against the unknown impacts of COVID-19.
The company has also offered a widened revenue range, with estimations between $1.58 billion and $1.67 billion. Intertape Polymer says that the forecast excludes any major unforeseen fluctuations in raw material prices.
As yet, the company has not been significantly impacted by COVID-19. However, the 2020 outlook includes possibilities for both growth and decline in the face of a rapidly fluctuating market.
Intertape Polymer Group (ITP) is currently up 2.86 per cent to $9.35 per share at 11:41am EST.
