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  • Transcontinental (TSX:TCL.A) shares saw a bump in Thursday trading after a fresh reading from one of Canada’s big banks
  • The company’s shares rose nearly 5 per cent in early trading after CIBC (TSX:CM) upgraded the packaging company from “neutral” to “outperformer”
  • This comes as TCL reported an increase of revenues  for Q1 of fiscal 2023
  • Transcontinental Inc. (TCL.A) shares were up 6.21 per cent, trading at C$13.35 per share as of 11:15 am ET and are up 3.6 per cent over the last five days

Transcontinental (TSX:TCL.A) shares saw a bump in Thursday trading after a fresh reading from one of Canada’s big banks.

The company’s shares rose nearly 5 per cent in early trading after CIBC (TSX:CM) upgraded the packaging company from “neutral” to “outperformer”.

This comes as TCL reported its results for Q1 of fiscal 2023 last week, which ended January 29, 2023.

The company highlighted an increase of revenues by $16.4 million, or 2.4 per cent, from $690.6 million in Q1 2022 to $707.0 million in Q1 2023. This increase is primarily attributable to the favourable exchange rate effect, mainly in the packaging sector, and the acquisitions of Éditions du renouveau pédagogique Inc. (ERPI), Banaplast S.A.S., and Scolab Inc.

Adjusted operating earnings before depreciation and amortization were $84.1 million for the quarter ended January 29, 2023; adjusted operating earnings were $41.8 million; and adjusted net earnings attributable to shareholders of the corporation of $21.1 million ($0.24 per share).

Peter Brues, President and Chief Executive Officer of TC Transcontinental stated in a media release on this news that increased profit in the packaging sector for the quarter was more than offset by the impact of lower volume in our printing sector.

“Our packaging sector recorded solid growth in adjusted profit, continuing to build on the momentum of the previous quarters. All our segments delivered improved profit in the quarter except our Latin American operations which experienced continued volume pressures. We expect that our focus on developing sustainable products and commitment to an improved cost position will support continued improvement.”

Looking ahead, the company expects organic volume growth in the packaging sector because of investments made in new production equipment, signing new contracts, and introducing new products to the market.

In terms of profitability, the team expects an increase in adjusted operating earnings for fiscal year 2023 compared to 2022 but advises that the economic environment could affect short-term demand.

TC Transcontinental is a leader in flexible packaging in North America and Canada’s largest printer. 

Transcontinental Inc. (TCL.A) shares were up 6.21 per cent, trading at C$13.35 per share as of 11:15 am ET and are up 3.6 per cent over the last five days.

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