Kodak's second quarter results reflect the reality of the pandemic's lockdowns and the resulting reduction in demand for print worldwide.
There was a 30% reduction in sales from $304 million in the second thee months of 2020, to $211 million this year. The company used $29 million of its cash pile and is comfortable with the situation. It expects sales to start growing again in Q3 as economies around the world revive.
The company has converted $95 million in convertible notes into equity, reducing debt on the balance sheet. It also reported a net loss of $5 million compared to a net profit of $201 million a year earlier, that figure boosted by the sale of its its flexo plate business. On a like to like basis, the loss for Q2 2020 was $2 million compared to $11 million, reflecting the effectiveness of corporate reorganisation that is underway.
The traditional offset business, Kodak's largest, took the largest hit with sales dropping from $181 million to $119 million, a fall of around a third. Within this, volumes of its Sonora plate have dropped 9% on a year to date basis, by 33% compared to Q2 last year. A new version of the process-free plate is being introduced, one of five new products unveiled this year. The Sonora Xtra has a stronger image contrast, improved handling robustness and faster imaging speeds. It should be commercially available at the end of the year.
The plate fits alongside the Magnus Q800 with T Speed to reach 80 plates an hour and running from a 3,200 capacity mutliplate loader. Commercial deliveries will start in September.
There are two new products in the digital print division, the Ultra 520 HD continuous feed inkjet press and the Sapphire Evo W. Both use Ultrastream print heads. Annuity revenue from Prosper dropped, leaving the division $17 million short of the $69 million revenue achieved in 2019, a 14% decline.
Revenue in Kodak's Advanced Materials and Chemicals division fell to $38 million ($52 million). It has been involved in creating PPE and will benefit from the manufacture of generic pharmaceuticals to be used in drug production, for which Kodak has signed a letter of interest. However, the shine has been rubbed off this potential deal by a bouncing share price and the timing of share transactions. Kodak has appointed a committee to review corporate conduct around this deal.