Ball Corporation announces improved results
third quarter earnings of $50 million (€51.2m) on sales of $1.039
billion, compared to $35.7 million on sales of $1 billion in the
same period a year ago.
Ball, the US-based global food packaging provider, has reported third quarter earnings of $50 million (€51.2m) on sales of $1.039 billion, compared to $35.7 million on sales of $1 billion in the same period a year ago.
For the first nine months of 2002, Ball's results were earnings of $127.4 million on sales of $2.949 billion. A year ago through three quarters Ball reported a loss of $109 million on sales of $2.843 billion. The loss last year was due to a second quarter after-tax charge of $194.7 million associated with the restructuring of the company's China packaging operations and the disposal of two aerospace developmental businesses. Excluding those charges, Ball said it would have earned $85.6 million in the first nine months of 2001.
R. David Hoover, chairman, president and chief executive officer, said both packaging and aerospace segment results were improved over last year's third quarter. "Our company continued to perform very well during the seasonally busy third quarter, with earnings up more than 40 per cent compared to the same period a year ago," Hoover said.
"In packaging, our unit shipments were up across the board, led by increases in demand for aluminium beverage cans and plastic beverage bottles. Metal food can earnings were down due to a poor salmon catch and startup costs for an important new production line, but year-to-date shipments of food cans are ahead of last year's record levels and that business will be positioned nicely when the new line is complete. "
Third quarter sales in the packaging segment were $911.1 million and earnings were $91.1 million, compared to $883.8 million and $73.7 million in 2001.
During the quarter the company announced that it is installing in its Milwaukee plant a high-speed line to manufacture two-piece steel food cans. Work on the project has progressed ahead of schedule with startup of the line expected in the first quarter of 2003. Also during the quarter, the company lowered its US pension plan asset return assumptions to 9 per cent, resulting in $1.9 million of incremental pension expense in the quarter.
The company said that demand in North America for aluminium and plastic beverage containers was strong during the quarter. Ball recently approved the installation of an 8.4 ounce trim can line in its Kansas City metal beverage container plant. The approximately $5 million project will complement the company's existing specialty container business.
During 2002, the company will add a total of four blow-moulding lines to existing plants for production of additional plastic bottles, primarily for soft drinks and water. At the end of the quarter the company closed a small older plastic bottle manufacturing facility that it had acquired at the end of 2001 and consolidated it into other existing facilities.
"Our plastic bottle shipments were up more than 33 per cent over the first nine months of 2001, with more than half of the growth coming from existing plants and the remainder through the acquisition we made at the end of last year," Hoover said. "Our beverage can shipments for the first three quarters were up nearly 1 per cent and our food can shipments were up 1.2 per cent compared to the same period in 2001 as we grew these mature metal can businesses. We continue to take steps to run our packaging operations more efficiently."
For the full financial year, Ball is predicting further improved results.
"At the end of the second quarter we said we expected our second half 2002 results to be similar to those of the first half. With our third quarter now complete, we continue to believe that will be the case. If anything, we expect the second half to be somewhat ahead of the first half," Hoover said.
Ball announced on 29 August that it would acquire Schmalbach-Lubeca, the second largest manufacturer of beverage cans in Europe, for approximately €900 million. Hoover said the company expects that transaction to close late this year or early in 2003.
"We are making productive use of the time between our announcement and the closing on Schmalbach to fine tune an integration plan that we believe will lead to a smooth and efficient combining of our beverage can businesses," Hoover said. "We are very impressed with the Schmalbach people, management, facilities and culture. We believe there is going to be an excellent fit between these two leaders in beverage can production and technology."
Ball Corporation is one of the world's leading suppliers of metal and plastic packaging to the beverage and food industries. The company also owns Ball Aerospace & Technologies. Ball reported 2001 sales of $3.7 billion, of which approximately $3.3 billion came from its packaging segment.
