Koppers Holdings Reports $13.9 Million Net Loss and $456.5 Million Revenue in Q1 2025

Koppers Holdings Inc. reported a net loss of $13.9 million for the first quarter of 2025, a significant decline compared to a net income of $13.0 million in the same period of 2024. The company's revenue for the quarter was $456.5 million, down 8.3% from $497.6 million year-over-year. The decrease in revenue was primarily attributed to lower sales in the Performance Chemicals and Carbon Materials and Chemicals segments, which saw declines of 19.5% and 17.8%, respectively. In contrast, the Railroad and Utility Products and Services segment experienced a 4.4% increase in sales, driven by higher volumes in the Class I crosstie business and price increases across most products.

The company undertook significant strategic actions during the quarter, including the acquisition of Brown Wood Preserving Company for approximately $100 million, which is expected to enhance Koppers' presence in existing markets and facilitate entry into new geographic areas. Additionally, Koppers announced the discontinuation of phthalic anhydride production at its Stickney, Illinois facility, a decision driven by high capital spending requirements and anticipated reductions in emissions. This shutdown is expected to incur pre-tax charges of $51 million to $55 million through the end of 2026.

Operationally, Koppers reported a total adjusted EBITDA of $55.5 million for the first quarter, reflecting a 7.8% increase from $51.5 million in the prior year. The Railroad and Utility Products and Services segment saw a notable increase in adjusted EBITDA, rising 44.1% to $25.5 million, while the Performance Chemicals segment's adjusted EBITDA decreased by 32.6% to $20.1 million. The Carbon Materials and Chemicals segment reported a significant increase in adjusted EBITDA of 147.5%, reaching $9.9 million, attributed to lower raw material costs and improved plant performance.

Looking ahead, Koppers anticipates a challenging environment due to competitive pressures and ongoing geopolitical uncertainties. The company plans to streamline operations and reduce costs to support profitability. Key focus areas include expanding market share in the utility pole market and improving the cost structure in the Performance Chemicals segment. Koppers also aims to mitigate the impact of potential tariffs on imports and exports, which could affect its cost structure and overall financial performance. The company maintains a liquidity position of approximately $320 million, which it expects to be sufficient to meet its cash requirements over the next twelve months.