Tuesday 26 March 2019

Ardagh hit by weak performance in US glass packaging business as it records loss of $94m

Ardagh's Paul Coulson
Ardagh's Paul Coulson

John Mulligan & Gavin McLoughlin

Irish bottle and can maker Ardagh swung to a net loss of $94m last year.

The company, run by veteran entrepreneur Paul Coulson, has been hit by weak performance in its North American glass packaging business.

The glass and metal container group, that has its roots in Irish Glass, saw its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), dip 2pc to $1.47bn in 2018.

"The decline principally reflected lower adjusted EBITDA in Glass Packaging North America, which was impacted by lower volumes, in particular in the beer end-market, as well as by increased freight and logistics costs," the company told investors.

The fall came despite revenue at the international firm rising 6pc to $9.1bn. On a constant currency basis, the increase was 3pc.

Ardagh also shouldered a $186m impairment charge to goodwill in relation to its North American glass packaging division.

Total exception items in 2018 amounted to $351m, and included $116m related to its “capacity realignment” programmes. Of that total amount, $267m related to the North American glass unit.

The reported loss for 2018 was $94m, compared to a profit of $63m in 2017. For the fourth quarter of 2018, it made a $144m loss compared to a $33m profit in the final quarter of 2017.

In the fourth quarter of 2018, revenue edged 1pc higher to $2.13bn, while adjusted EBITDA was also up 1pc, at $338m.

Ardagh has embarked on a restructuring plan for that division which Mr Coulson said was proceeding as planned.

Last month, Ardagh said that it would close a glass container manufacturing plant in Illinois.

The US glass division has been a disappointing performer for the company, which said the plant closure would enhance its competitiveness.

Mr Coulson said that revenue and adjusted EBITDA rose in the fourth quarter despite an adverse currency headwind. He added that the group saw volume growth in three of its four divisions.

"Metal packaging performed well in the quarter, with adjusted EBITDA growth of 12pc and notable strength in beverage can demand during both the quarter and full year," he said.

Mr Coulson added: “Glass packaging in Europe delivered another strong performance in 2018, with broad-based volume growth. Adjusted EBITDA for the quarter increased by 5pc and market conditions are positive. In GlassNorth America, our ongoing initiatives to improve financial performance are proceeding as planned.”  

Ardagh operates more than 100 facilities in 22 countries across five continents, employing approximately 23,000 people.

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