Crown upbeat about 2010 as can volumes rise

By Guy Montague-Jones

- Last updated on GMT

Related tags United states dollar Generally accepted accounting principles Crown

Crown Holdings is upbeat about growth prospects for 2010 after global beverage can volumes rose markedly in the first quarter.

Net sales for the three months ending March 31 rose 5.5 per cent to $1,777m driven by improvements in volumes and favourable currency exchange effects.

Volume improvements

While foreign currency translation accounted for $79m of the $93m increase, volumes were also up significantly on the equivalent period last year. Crown said global beverage can sales unit volumes increased 4.5 per cent.

Despite these improvements, turnover in the quarter was still some way off the net sales figure of $1,863 that was reported for the pre-recessionary first quarter of 2008.

As for the bottom line, Crown said gross profit increased from to $250m in 2008 to $245m in the latest quarter. The can manufacturer profits benefited from a $20m settlement of a legal dispute unrelated to ongoing operations.

Meanwhile, net income in the first quarter rose by just $1m to $41m. The increase was more muted than the increase in gross profits because of an increased tax bill, related to the new US health care legislation, and restructuring charges, linked notably to the closure of food can plant in Canada.

Commenting on the results, Crown CEO John Conway said: “Although it is our seasonally smallest quarter, the company achieved excellent operating results for the first three month period, beating our own expectations and setting the stage for another strong year.”

Emerging markets

Conway flagged up the role of emerging markets in the company growth plans. He attributed much of the beverage can volume improvement to continued growth in the emerging markets of Asia and South America as well as initial production from a new plant in Slovakia.

Looking forward, Conway said: “During the quarter, we announced four significant expansion projects: two in Brazil and one each in China and Vietnam. These are in addition to projects that were already underway in Brazil and Thailand, all of which are to meet the growing demand in these emerging markets. All-in-all, we remain excited about our growth opportunities in 2010 and beyond.”

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