Rexam has claimed that its results for the first quarter of 2010 beat expectations, helped on by improved beverage can volumes.
For the three months beginning 1 January 2010, Rexam said European beverage can volumes grew thanks to the strong performance of specialty cans. Meanwhile beverage can volumes continued to grow strongly in South America but were down 1 per cent in North America despite “good progress” in specialty can volumes.
Last year specialty cans put a big dent in volumes. For the full year they were down 14 per cent as consumers moved away from premium priced canned drinks and brand owners launched fewer new products.
The cost reduction programme put in place to stem any squeeze on profits in beverage cans is now complete and is expected to reduce yearly costs by about £19m from 2010. Rexam has trimmed back its production footprint significantly on both sides of the Atlantic closing plants in Europe and reducing its North American capacity by 15 per cent.
Rexam said that profits from the beverage can business are somewhat higher than expected at this stage but qualified the improvement by saying that it is still early in the year and uncertainty remains in Russia where a hike on beer duty could eat into volumes.
Within the plastic packaging division, Rexam said personal care volumes were showing some signs of recovery but the situation in closures less rosy. Rexam said closures continued to decline due to weak demand for carbonated soft drink and bottled water closures.
Rexam chief executive Graham Chipchase said: “Trading in the first quarter was encouraging with beverage can volumes better than expected in Europe and North America.
“However, it is still early in the year, and trading in the traditionally busy summer season will influence our full year performance.”