WestRock’s fiscal fourth-quarter results took a hit from costs linked to ongoing facility closures and a decrease in global paper sales, the company reported Thursday, noting year-over-year declines in net sales and income. Lower global paper sales contributed to the decrease, but were partially offset by a nearly 5.8% increase in sales for the corrugated packaging segment.
Costs during the quarter, which ended Sept. 30, totaled $344 million, largely due to downtime and the closure of its Tacoma, Washington, paper mill, dragging down net income. The Tacoma closure, announced in August, is just one in a string of closures that WestRock announced this year during “restructuring,” including in Anne Arundel County, Maryland; Columbus, Indiana; Hazleton, Pennsylvania; North Charleson, South Carolina; and St. Louis, among others.
Conversely, the company touted a $239 million gain from a sale that closed in September, involving Sonoco acquiring WestRock’s remaining stake in RTS Packaging and a paper mill in Chattanooga, Tennessee. The company also reported $324 million in capital expenditure investments in fiscal Q4.
WestRock released earnings data but did not host a conference call this cycle, given its pending acquisition by Smurfit Kappa, which they jointly announced in September. Other than mentioning that the announcement to create fiber-centric mega company Smurfit WestRock occurred in fiscal Q4, WestRock did not reference the deal in its earnings release.
Last week, Smurfit Kappa CEO Tony Smurfit led the company’s earnings call by briefly addressing the acquisition, saying that his team members had visited numerous WestRock facilities and are “incredibly excited” about the deal. The “combination represents a unique point-in-time opportunity to create significant value,” Smurfit said. Analysts generally expect the transaction to proceed without regulatory pushback. The companies said in September the deal is expected to close in Q2 2024.
