Ardagh full-year underlying earnings fall amid rising costs and dollar

Ardagh Group, the glass and metal containers group led by Irish man Paul Coulson, reported on Thursday that its underling earnings fell last year, as margins contracted due to rising input costs and dollar strength against currencies such as the euro and sterling.

Pro-forma adjusted earnings before interest, tax, depreciation and amortisation (Ebitda), which assumes a South African glass business acquired last May had been part of the group since the start of 2021, fell almost 7 per cent on the year $1.41 billion (€1.33 billion).

The group’s Ebitda margin contracted to 14.2 per cent from 17.2 per cent for the previous year. Pro-forma revenues rose 12.5 per cent to $9.23 billion as it passed through higher costs to customers where possible.

Ardagh Group owns 100 per cent of Ardagh Glass Packaging (AGP) and 76 per cent of Ardagh Metal Packaging (AMP), which is listed on the New York Stock Exchange.

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AMP Europe’s Ebtida fell by 29 per cent last year to $200 million, mainly reflecting input cost headwinds, increased operating costs and a $32 million currency hit from converting euros into dollars, it said. However, AMP Americas’s earnings increased 12 per cent to $425 million.

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AGP Europe and Africa saw its Ebitda dip 6 per cent, driven by the $59 million impact of unfavourable foreign-exchange rates. AGP North America’s earnings declined by 14 per cent to $163 million.

Mr Coulson holds an indirect 33 per cent stake in Ardagh Group, which has been investing heavily in recent times in ramping up production — especially in its beverage cans business — to take advantage of rising underlying growth in demand for recyclable packaging products on both sides of the Atlantic.

Ardagh Group took a $244 million impairment charge against its AGP North American business last year, following on from a $395 million charge against the assets in 2021.

The group’s net loss narrowed last year to $348 million from $739 million in 2021.