WestRock Co (WRK) Reports Fiscal Fourth Quarter and Full Year 2023 Results

  • WestRock Co (NYSE:WRK) announces a net income of $110 million for Q4, with adjusted net income at $210 million.
  • Net sales reached $5.0 billion in Q4, despite a 7.7% decline from the previous year.
  • Full-year 2023 net loss reported at $1.6 billion, with adjusted net income of $778 million and consolidated adjusted EBITDA of $3.0 billion.
  • Corrugated Packaging segment Adjusted EBITDA increased by 13.0% compared to Q4 of fiscal 2022.

On November 9, 2023, WestRock Co (NYSE:WRK), a leader in sustainable paper and packaging solutions, disclosed its financial results for the fourth quarter and full fiscal year ending September 30, 2023. The company faced a challenging quarter with net sales of $5.0 billion, a decrease of 7.7% from the same period last year. Despite these challenges, WestRock reported a net income of $110 million and an adjusted net income of $210 million for the quarter. The company’s full-year 2023 results showed a net loss of $1.6 billion, significantly impacted by a $1.9 billion pre-tax, non-cash goodwill impairment and $859 million of pre-tax restructuring and other costs. However, adjusted net income for the year stood at $778 million, with consolidated adjusted EBITDA reaching $3.0 billion.

Financial Performance Overview

The decline in Q4 net sales was primarily driven by a $417 million decrease in Global Paper segment sales, partially offset by a $138 million increase in Corrugated Packaging segment sales, which includes the operations of the Mexico Acquisition. The net income for Q4 decreased by 68.1% compared to the previous year, largely due to higher restructuring costs, lower selling price/mix, and increased non-cash pension costs, among other factors. These were partially offset by a $239 million gain on the sale of the company’s interior partitions converting operations and Chattanooga mill.

Segment Performance and Cash Flow

The Corrugated Packaging segment saw a 5.8% increase in sales and a 13.0% increase in Adjusted EBITDA, attributed to cost savings, net cost deflation, and the Mexico Acquisition. The Consumer Packaging segment experienced a 7.2% decrease in sales, with Adjusted EBITDA margin remaining stable at 16.8%. The Global Paper segment faced a significant 29.2% decrease in sales and a 56.4% decrease in Adjusted EBITDA, primarily due to lower selling price/mix and volumes.

WestRock’s net cash provided by operating activities was $584 million in Q4, with total debt at $8.6 billion and adjusted net debt at $8.0 billion. The company invested $324 million in capital expenditures and returned $71 million to stockholders in dividend payments during the quarter.

Strategic Developments and Outlook

CEO David B. Sewell expressed pride in the team’s strong quarter performance and highlighted the company’s commitment to delivering shareholder value through portfolio optimization, cost savings initiatives, and strategic growth plans. WestRock also announced a 10% dividend increase in October 2023 and a proposed business combination with Smurfit Kappa Group plc to create a global leader in sustainable packaging.

While WestRock will not host a conference call due to the proposed transaction, detailed financial and statistical information is available on their investor relations website. The company remains focused on unlocking additional cost savings and driving profitable growth as it enters fiscal 2024.

For a detailed analysis of WestRock Co (NYSE:WRK)’s financial results, including segment performance and cash flow activities, visit GuruFocus.com.

Explore the complete 8-K earnings release (here) from WestRock Co for further details.

Article Source: GuruFocus.

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