The
"Obviously, things are improving as many businesses are back to business, they're back advertising," chief financial officer
About half of its operations were idled as printed volumes dropped 45 per cent in April.
LeCavalier doesn't think the printing business will fully recover by early fall but could reach 80 per cent by that time if there isn't a second wave of infections.
"We're very dependent on business staying open and businesses in
Many retail customers that remained open during the crisis used flyers to communicate COVID-related information and to help build brand loyalty, added chief executive
"This crisis has shown that the print flyers remain a relevant and effective marketing tool. It will continue to be very relevant to drive people to stores and help Canadians save money in a challenging economic environment with higher unemployment rate and food price inflation."
While its printing business has been affected by lower demand for flyers and other products, Transcontinental's packaging division has been helped by food retailers seeing increased demand during the pandemic.
"Packaging performed very well during the crisis. In a difficult operating environment, we managed to meet increased demand from customers and market-related to food and other essential consumer products, which represents over 80 per cent of our portfolio in this sector," said Olivier.
The company said Wednesday it earned
Excluding one-time items, adjusted earnings fell 17 per cent to
Revenue fell 18.5 per cent to
Transcontinental was expected to report
The results beat expectations on a solid quarter for packaging, with EBITDA (earnings before interest, taxes, depreciation and amortization) growing 8.8 per cent to
"Consistent with previous management commentary, increased demand from food retailers more than offset volume declines in other verticals," he wrote in a report.
Printing had a "choppy quarter" as expected with revenues decreasing 20.5 per cent to
Transcontinental said the sector will face a continued decline in demand for most of its printing businesses that has been amplified by the pandemic, whose future impact remains unpredictable.
"Operational efficiency and cost reduction initiatives taken since the beginning of the fiscal year will help mitigate the impact of volume declines on our operating earnings," it said.
In addition, it has been helped by pandemic-related products such as signage for physical distancing, Plexiglas panels for several large Canadian retailers and protective visors for local community organizations.
Meanwhile, it expects increased packaging profit markets as a result of synergies, efficiency initiatives and organic growth in the second half of the year.
This report by
Companies in this story: (TSX:TCL.A).
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