Shares in Paul Coulson’s Ardagh jump on target-beating results
Strong performance in metals and European glass operations offsets falling sales and rising costs at North American glass business
Ardagh chairman and chief executive Paul Coulson, hailed the benefits of scale and diversity as the company reported strong earnings Thursday despite falling sales at its US glass business. Photograph: Frank Miller
Shares in Ardagh Group, the glass and metal container maker built up by Dublin businessman Paul Coulson, soared on Thursday in New York as the group reported better-than-expected earnings for the first three months of the year.
The company, which listed last year on the New York Stock Exchange, said on Thursday that its sales jumped 13 per cent to $2.22 billion (€1.83 billion) in the first three months of the year compared to the same period in 2017. On a constant currency basis, that turnover was 5 per cent ahead, year on year.
Adjusted earnings per share (EPS) rose by 6 per cent to 33c, comfortably beating the average estimate among analysts of 27c and sending Ardagh’s shares up as much as 7.7 per cent on Wall Street in early trading.
Earnings before interest, depreciation, tax and amortisation (Ebitda) were 9 per cent stronger on a reported basis at $348 million (€287 million), and 1 per cent better in constant currency terms.
Mr Coulson, who is chairman, chief executive and 33 per cent shareholder of the group, said the results “highlights the benefits of Ardagh’s scale and diversity” with three of its four divisions reporting growth.
“A strong performance in both metal packaging divisions and in glass packaging Europe more than offset a decline in glass packaging North America, where we remain focused on the implementation of our profit improvement initiatives,” Mr Coulson said.
The company’s North American glass business suffered a 10 per cent decline in revenue on the back of falling sales volumes, the company said. Profits at the unit were also impacted by higher transport and other costs.
However, revenues across Ardagh’s metals businesses were over 20 per cent ahead year on year while the European glass unit reported a 17 per increase in sales.
The company said the increase in its overall revenue was attributable to the impact of a $154 million (€127 million) favourable swing in foreign exchange, a 3 per cent rise in volumes sold and its success in passing on to customers increases in input costs.
Net debt at the end of the quarter stood at $8.4 billion (€6.9 billion), up from $7.6 billion (€6.2 billion) at the same point in 2017.
Ardagh said its full-year guidance remained unchanged. It has pencilled in Ebitda of around $415 million (€343 million) for the current quarter – the same as in 2017.
The company plans to pay a dividend of 14 US cent per share on the back of the results, payable on May 31st.
Ardagh operates 108 plants in 22 countries, with global annual sales of around $8.6 billion (€7.1 billion). It employs in the region of 23,300 people.