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Kraton Share's Rise on Positive Q1/20 Earnings Report

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Source: Streetwise Reports   04/30/2020

Shares of Kraton Corp. traded 24% higher after the specialty polymers and high-value biobased products maker reported that net income in Q1/20 increased to $209.0 million, compared to $13.6 million in Q1/19.

Kraton Corp. (KRA:NYSE) yesterday announced Q1/20 financial results for the period ending March 31, 2020.

The company reported that Q1/20 results reflect the benefit of its geographic and end-market diversification and that the current COVID-19 situation had no material impact on the firm in the quarter. Kraton noted that its plants have continued to operate at normal capacities throughout the pandemic and its supply chain has remained intact without any interruptions in availability of raw materials.

The firm stated in Q1/20, it achieved consolidated net income of $209.0 million, compared to $13.6 million in Q1/19. The company noted that the Q1/20 consolidated net income included a gain of $175.2 million from the sale of its Cariflex™ business.

The company indicated that Q1/20 consolidated adjusted EBITDA was $77.9 million, which decreased by 12.9% from Q1/19. The firm outlined that operating income for its Polymer segment in Q1/20 increased to $17.9 million, up 93.8% compared to Q1/19, but that its Chemical segment operating income decreased by 60.1% to $10.3 million in the quarter.

The company’s President and CEO Kevin M. Fogarty commented, “As for our overall Q1/20 results, we are very pleased to have delivered $77.9 million of Adjusted EBITDA, especially considering this to be against a backdrop of such a uniquely challenging global operating environment…During the quarter we saw positive demand trends in a number of end markets, including medical applications such as IV bags and in personal care and hygiene products. We also saw growing sales into adhesive markets, driven by tapes and labels for packaging applications as well as construction adhesives used in applications such as medical gowns and masks.”

“We are also very pleased to have completed the sale of our Cariflex business in the quarter, providing for a substantial debt reduction and improving our capital structure and liquidity position,” Fogarty added.

The company stated that even though its Q1/20 results were not materially impacted by COVID-19, the progression of COVID-19 may result in significant disruption in global demand fundamentals for the balance of 2020. Therefore, the company advised that as it is not possible to determine the magnitude or duration of the impact that COVID-19 may have for the balance of 2020, it is not providing FY/20 Adjusted EBITDA guidance at this time.

Kraton Corp. is headquartered in Houston and is a global producer of specialty polymers and high-value biobased products derived from pine wood pulping co-products. The company’s sustainable polymers are used in numerous areas including adhesives, automotive, coatings, lubricants, medical, packaging, paving, personal care products and roofing applications. The firm stated that it is the largest global provider in the pine chemicals industry. Kraton’s specialty pine-based products are sold into adhesives and tire markets. It additionally manufactures many performance chemicals including fuel additives, oilfield chemicals, coatings, fluids and lubricants and inks.

Kraton began the day with a market capitalization of around $423.3 million with approximately 31.83 million shares outstanding. KRA shares opened 10.75% higher today at $14.73 (+$1.43, +10.75%) over yesterday’s $13.30 closing price. The stock has traded today between $14.29 and $18.35 per share and is currently trading at $16.53 (+$3.24, +24.38%).

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Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: KRA:NYSE, )



Source: https://www.streetwisereports.com/article/2020/04/30/kraton-shares-rise-as-on-positive-q1-20-earnings-report.html
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