TORONTO, July 29, 2019 /CNW/ - Richards Packaging Income Fund (TSX: RPI.UN) (the "Fund") announced today results for the quarter ended June 30, 2019.
"The shock created by the Trump China tariff will cause the US market to keep adjusting until it finds equilibrium. We lost a large customer (US$4 million per annum) to a domestic glass manufacturer and a second large customer (CAD$4 million per annum) due to customer consolidation. Although we experienced revenue growth of 6.5% for the second quarter, organic growth was 2.8%, down from 5.6% during the first quarter. We mitigated the impact during the second quarter as the lost revenue from two large customers ($2.0 million) was offset by the sale of our extra inventory investment to large customers outside our base ($1.1 million or 1.4%) and organic growth. The remaining 3.7% reflects the benefits of a weakening Canadian dollar to U.S./Cdn.$0.75. At current exchange levels, no further gains from translation will be realized in 2019.
One key thing to note is that the new lease accounting policy required under IFRS was implemented effective January 1st with the impact outlined in the notes to the financial statements. After discussions with our bank we also modified the definition of adjusted EBITDA and distributable cash flow to reverse the effects of these changes as outlined in the MD&A." commented Gerry Glynn, Chief Executive Officer.
The Fund paid return of capital of 33¢ per Unit during the second quarter, which represented an annualized yield of 3.1% on the June 30th closing price of $42.91 per Unit.
About Richards Packaging Income Fund
The Fund owns Richards Packaging Inc. ("Richards Packaging"), the leading packaging distributor in Canada, and third largest in North America. Richards Packaging is a full-service packaging distributor targeting small- and medium-sized North American businesses. Richards Packaging has operated since 1912 and currently serves over 14,200 regional companies from 18 locations throughout North America.
SOURCE Richards Packaging Income Fund
For further information: Gerry Glynn, Chief Executive Officer, Richards Packaging Inc., (905) 670-7760, [email protected]; Enzio Di Gennaro, Chief Financial Officer, Richards Packaging Inc., (905) 670-7760, [email protected]