Ardagh’s chief backs Trump's Chinese tariff plan
Packaging group revenue up more than 10 per cent to $4.57 billion in first half of year
Ardagh chairman and chief executive Paul Coulson, said the group’s second-quarter figures reflected good performances in three of its four divisions.
Mr Coulson partly blamed cheap imports from China and Mexico for ongoing problems at Ardagh’s North American glass business, where group earnings in the three months ended June 30th fell by 6 per cent to $392 million.
“We have previously noted the level of what we believe are effectively subsidised, imported glass containers being sold into the North American glass market and we welcome the recent inclusion of glass containers on the proposed list of Chinese-manufactured products to be subject to new importation tariffs,” he told industry analysts.
Mr Coulson added that as an employer of 7,000 skilled US workers, Ardagh viewed initiatives to ensure a level playing field and fair trade practices as essential to the long-term future of the country’s glass packaging industry.
He hinted that Ardagh and its rivals could be forced to close further US factories to combat the cheap imports and rising costs, which have slowed a recovery in the group’s North American glass-making division.
Ardagh closed a beer bottle manufacturing plant in Milford, Massachusetts in March with the loss of about 250 jobs.
Irish financier Mr Coulson is chairman and chief executive of Ardagh, a Luxembourg-headquartered group that is one of the world’s biggest producers of food and drink containers.
Now listed on the New York market, Ardagh has it roots in the Irish company of the same name, and makes bottles and cans for customers including Heineken, Coca-Cola and L’Oréal.
Ongoing difficulties with its North American glass division and the impact of the strong dollar prompted Ardagh to cut its forecast for this year’s earnings before interest, tax, depreciation and amortisation, a measure of the cash a company generates, to $1.5 billion from $1.6 billion.
Ardagh’s warning that earnings could fall below previous expectations sent its shares tumbling. The company’s stock was down more than 9 per cent at $15.10 in New York as European markets closed on Thursday.
The Milford closure was among a number of steps that Ardagh took to improve the glass business’s performance. However, Mr Coulson said these would deliver benefits on a more gradual basis than previously expected.
Ardagh’s revenues in the six months ended June 30th rose more than 10 per cent to $4.57 billion from $4.17 billion during the same period in 2017.
Profits in the first half of 2018 were $43 million, turning around a $31 million loss in the six months ended June 30th last year. First-half earnings per share were 18 cent, against a loss of 14 cent at the interim stage in 2017.
Mr Coulson said Ardagh’s second-quarter figures reflected good performances in three of its four divisions: Americas metal packaging, Europe metal packaging and Europe glass packaging.
Ardagh recently pledged to repay $440 million of its debt at the end of this month. The group’s net liabilities were $8 billion at the end of June, slightly ahead of the $7.8 billion it owed creditors on December 31st.
Profits in the second quarter of the year – the three months ended June 30th – rose 45 per cent to $58 million from $33 million during the comparable period in 2017.
Ardagh said second-quarter revenues rose 6 per cent to $2.35 billion from $2.21 billion in the same three months last year.