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Dec 31, 2023
Tredegar Q4 2023 Earnings Report
Tredegar reported improved results compared to the third quarter of 2023, with signs of recovery in Bonnell, positive preliminary determinations regarding a trade case, and improved EBITDA at PE Films.
Key Takeaways
Tredegar Corporation reported a net loss of $(35.6) million for Q4 2023, compared to a loss of $(3.9) million in Q4 2022. However, results were better than expected and improved compared with the third quarter of 2023.
Aluminum Extrusions' EBITDA from ongoing operations was $8.0 million, with sales volume at 32.9 million pounds.
PE Films' EBITDA from ongoing operations was $4.5 million, with sales volume at 8.5 million pounds, driven by increases in both surface protection and overwrap films.
Flexible Packaging Films' EBITDA from ongoing operations was $2.3 million, with sales volume at 22.8 million pounds.
The company is progressing with the sale of Terphane and has amended its credit agreement to an asset-based lending facility.
Tredegar
Tredegar
Tredegar Revenue by Segment
Revenue by Segment
Aluminum Extrusions Revenue
CapyFin.comPE Films Revenue
CapyFin.com Forward Guidance
Tredegar expects positive recent performance in PE Films to continue in 2024 and is making progress on corporate strategic initiatives, including the sale of Terphane and transitioning to an asset-based lending facility.
Positive Outlook
- PE Films' EBITDA was $8.6 million during the second half of 2023 compared with $2.7 million during the first half, with expectations for this positive recent performance to continue in 2024.
- U.S. authorities have made favorable preliminary determinations regarding a trade case backed by a coalition of members of the Aluminum Extruders Council.
- The process to complete the sale of Terphane is advancing as planned, including the review required by competition authorities in Brazil.
- In early November, the company settled its pension plan.
- Favorable operating results have improved the company's outlook for its financial leverage.
Challenges Ahead
- The company faces potential risks and uncertainties that could cause actual results to differ materially from forward-looking statements.
- These risks include inability to successfully complete strategic dispositions, noncompliance with financial covenants, and the impact of macroeconomic factors.
- There are concerns about disruptions to manufacturing facilities, inability to develop new products, and the impact of tariffs on imported aluminum ingot.
- The company is exposed to competition from manufacturers in lower-cost countries and fluctuations in foreign exchange rates.
- The company may have to undertake alternative financing plans if the Contingent Terphane Sale is not completed by the ABL Adjustment Date.
Revenue & Expenses
Visualization of income flow from segment revenue to net income