Kodak close to sale of flexo plates business

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Kodak will announce the buyer for the flexo packaging division it put for sale earlier this year in the next few days.

Kodak is on the point of announcing the sale of its Flexographic packaging division. The company is in exclusive negotiations with a potential purchaser, says CEO Jeff Clarke, with a deal expected to be announced before the end of the year and completed within the first six months of 2019. “We are in advanced negotiations on an exclusive basis,” he says.

The period of exclusivity with the possible purchaser ends today (12 November) though there is no guarantee that this will result in a binding offer and sale. Any proceeds will be used to repay Kodak debt, says the company.

The Flexcel NX flexo plate continues to be one of the three growth drivers in the business alongside the Sonora plate family and Prosper inkjet products. Volumes of the flexo plate increased 17% and revenues generated grew 16%. Meanwhile, volumes of Sonora plates increased 17% in Q3 compared to the same period in 2017. The latest iteration, the Sonora X, continues to perform in testing, with more than 1,000 accounts testing the process-free plate. More than 600 have switched to the plate, including a multi-site US printer handling 1 million square meters a year.

Revenues from Prosper inks increased 8% with further revenue coming from printer placement in the period. Combined, the growth product areas accounted for 32% of the US$ 366 million revenue for the quarter. This was an decrease of US$ 13 million compared to Q3 last year. Operating profit increased US$ 7 million to US$ 20 million, but would have been higher without a US$ 6 million increase in the cost of aluminum for plate production.

With the gains from cost-saving measures and without the price rise, Kodak says the increase would have been around US$ 11 million for the year. Plate volumes remained flat, Clarke says.

Revenue across the print systems division, the largest of its sectors, fell 5% to US$ 217 million.

Sales associated with now-discontinued Versamark presses continue to fall as planned. Prosper is the growth driver with Ultrastream positioned as a system for partners to integrate with, the product to generate future growth. Kodak expects to ship the higher quality inkjet technology in the new year and to reap the rewards from initial users in 2020.

It is all anticipating a strong fourth quarter in line with the industry’s seasonality. The company will be generating cash in Q4, says CFO David Bullwinkle, helped by the completion of actions to reduce operating costs. It expects to close the year with revenues around US$ 1.5 billion and Ebitda of US$ 55-60 million.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

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