Ardagh announces testing third quarter amid US automation speculation
12 Nov 2018 --- Global metal and glass packaging specialists Ardagh has announced a 9 percent drop in profits while recording a 3 percent increase in revenue in its third quarter financial results. Overall revenue was recorded at US$2.39 billion, however profit prior to tax shows a 9 percent decrease (US$400 million). Lower earnings in glass packaging in the US and metal packaging in Europe, in addition to cost inflation, are reasons for the profit decrease.
Paul Coulson, Chairman and Chief Executive, says of the results: “In a period marked by high levels of cost inflation, third-quarter earnings reflected strong growth in Metal Packaging Americas, with all parts of that business performing very well. In Europe, we recorded good growth in glass packaging during the quarter, while our metal packaging business was adversely impacted by a weak food harvest.”
“In Glass Packaging North America, our footprint adjustments and other initiatives to rebuild profitability continued against a challenging market backdrop. We remain focused on cash generation and de-leveraging over the final quarter and into 2019,” he adds.
Highlights of the third quarter results are as follows:
- Revenue of US$2,390 million increased by 3 percent;
- Adjusted EBITDA of US$400 million, declined by 9 percent;
- Beverage can integration completed, with global volume/mix growth of 4 percent in the quarter;
- Continued growth in glass container volume/mix in Europe;
- Earnings per share of US$0.03 (2017: US$0.26);
- Adjusted earnings per share of US$0.52 (2017: US$0.57);
- Quarterly cash dividend of US$0.14 per common share, payable on November 30, 2018;
- 2018 outlook: Full year Adjusted EBITDA of approximately US$1,450 - US$1,475 million, with Adjusted free cash flow of approximately US$475 million and Adjusted earnings per share of US$1.60 – US$1.70.
The Irish Independent newspaper reported that the company was considering increasing its levels of automation in its US plants because of labor issues and healthcare costs.
“I think one of the things you’ll see, and certainly one of the things we have to look at because of the issue on labor cost and labor availability, is more automation of our plants,” Coulson said in Dublin last month.
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