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Ball reports recovery in drinks can business

By Guy Montague-Jones , 11-May-2010

Ball Corporation has reported higher demand for its drinks cans both in Europe and North America as the company emerges from a tough 2009.

The US-based packaging company posted a 7.6 per cent year-on-year increase in first quarter net sales to $1.6bn, helping to take net earnings from $69.5m in Q1 2009 to $79.3m this year.

Metal recovery

Within the metal beverage packaging business, sales in the Americas and Asia rose from $620.4m to $774.4m, taking operating earnings up from $46.2m in 2009 to $74m this year.

Ball said the sharp improvement in the results was primarily down to new US plants acquired late 2009 and the absence of higher cost inventory that had affected the segment last year. Results in China and Brazil also contributed to the improvement in sales and profits.

Meanwhile, in Europe sales of metal beverage packaging rose 6.8 per cent to $367.5m and operating earnings were up from $30.9m to $35m. Ball said market demand increased during the quarter, continuing an upward trend that began in the fourth quarter of 2009.

Plastic weakness

Progress from the drinks can business on both sides of the Atlantic was not accompanied by better figures from the plastic packaging division in the Americas.

Plastic packaging sales were down from $159.7m last year to $113.9m this time around as weak demand continued in the cold-fill PET segment. Ball added that the lower results were also due to a qualification issue at one PET plant and a delay in the startup of a new PET preform contract – issues that have both now been resolved.

Giving an overall comment on the results, John Hayes, Ball CEO said: “As we enter the seasonally strong quarters for our packaging businesses, we expect to continue to benefit from our past actions, the execution of our current initiatives and improving markets.

Promotional activity by our customers is increasing and we see potential upside as the global economy strengthens.”

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