By Jo Francis, Thursday 10 May 2018
Kodak achieved double-digit growth in volumes for its Sonora process-free and Flexcel flexo plates in Q1, but posted a loss for the quarter amid moves that could lead to more M&A activity at the business.
In the three months to overall sales were flat at $357m (£263.6m). Kodak said that operating EBITDA would have improved from $6m to $8m were it not for the impact of aluminium costs.
The firm posted a $25m net loss for the period, compared to a $7m profit in the same period last year.
Sales at its Print Systems Division rose by $3m to $216m but operational EBITA was hit by rising aluminium costs and fell by $8m to $4m.
Sonora plate volumes were the highlight, increasing by 21%, and Kodak has high hopes for the new Sonora X plate, which it said would expand the product’s reach “from 30% to 80%” of the potential market.
The manufacturer also launched a new digital press, the Nexfinity, during the period.
At Kodak’s Flexographic Packaging Division, sales increased from $33m to $37m, boosted by a 15% increase in Flexcel NX plate volumes. Operational EBITDA was up from $6m to $7m.
Sales at Enterprise Inkjet Division slipped by 16% to $37m despite an 8% increase in annuities from its Prosper install base, which was not sufficient to overcome the decline in its legacy Versamark business. It also invested $3m during the period in its latest Ultrastream technology. The division broke even, the same as last year, thanks to cost reductions.
The Software & Solutions Division, which includes Kodak’s Unified Workflow and Prinergy product lines, posted sales down $1m to $20m, primarily due to a decline in Unified Workflow sales. Like Enterprise Inkjet, it broke even year-on-year.
Kodak also said that it planned to make a further $53m in cost reductions this year, of which $41m would come through headcount reduction, and $12m from manufacturing improvements. It employed 5,625 people worldwide at the end of April, down 403 on the prior year.
Chief executive Jeff Clarke said the company could sell off surplus assets, such as property, and there is speculation that Kodak could also dispose of some operations as part of a “thorough review” of its portfolio aimed at deleveraging the business.
“We continue to look at the overall portfolio of Kodak and different M&A opportunities, to both build scale and to divest assets,” he said, but would not be drawn on details or any likely timescales.
Kodak attempted to sell its Prosper and Ultrastream inkjet operations in 2016 but then reversed the decision a year later.