Kodak continued to increase revenues in Q3 but the signs are there that this run of six consecutive quarters of growth may not be sustained for much longer. The summer quarter produced revenues of $289 million, a fraction above the $287 million received in the same period in 2021.
Volumes of its key Sonora plates were 10% lower and revenues from Prosper dropped 11%, indicating that customers are experiencing a fall off in business. The fourth quarter, the busiest of the year, ought to deliver a bounce back, with longer term questions carried over until next year.
The traditional printing sector remains the largest with revenue of $169 million ($166 million) with the digital and advanced materials operation swapping position. Revenues through digital in Q3 were $55 million from $58 million. In advanced materials last year’s Q3 revenues of £55 million became $58 million this year.
Digital print is very much the future for Kodak. The new high speed Prosper 7000 and the offset replacement Ultra 520 inkjet press will press their value CEO Jim Continenza believes. In a presentation to analysts, he said: “Groundbreaking products like these have helped us bring digital print to the tipping point where it should be considered as a complement to traditional print.
“Said differently, it’s not digital or traditional. It’s digital and traditional. They need to work together and they should mitigate each other’s risk and bring additional flexibility of profitability to your business.
“Another key factor to digital print is the carbon footprint associated with it. If you look at traditional print, the amount of chemicals, aluminium transportation, harvesting, yielding the carbon footprint is quite large with digital print smaller and we will continue to support a much smaller carbon footprint.”
The printing plate supply chain is not yet a concern for printers, though when examined the mining, smelting and processing of aluminium requires vast energy inputs even before transport to the printer and processing for conventional plates. The impact of inkjet ink, largely comprising water, is negligible by comparison. As printers feel pressure to reduce carbon impacts, the feeling is that digital print will become more attractive.
The company produced a marginal improvement in Ebitda to $7 million from $6 million. Continenza identifies continued supply chain disruption, increased materials, energy and labour costs as challenges for the company to overcome and which it is taking action to prepare for.
He adds: “This continuing growth reflects our management team’s experience with difficult business environments and our commitment to finding ways of putting our customers first despite ongoing inflationary and supply chain challenges.”
