Financials round-up: Silgan records 8% sales decrease in Q2 FY23 as Ardagh Metal Packaging’s gross profit dip 33% in Q2 FY23

USA – Sustainable rigid packaging solutions provider Silgan has reported net sales of US$1.43 billion for the second quarter (Q2) of financial year 2023 (FY23), down 8% from the corresponding period’s figure of US$1.54 billion.

During the quarter ending 30 June 2023, the company’s Dispensing and Specialty Closures segment saw its sales drop 7% to US$560.1 million, with its Metal Containers and Custom Containers segments also suffering a sales drop of 6% and 17% respectively over the quarter.

Silgan also saw its net income decrease to US$78.9 million in Q2 FY23, from US$92.7 million in the same period last financial year.       

Its income before interest and income taxes (EBIT) for Q2 FY23 was US$144.0 million. Its earnings per diluted share were US$0.71 over the quarter, against US$0.83 a year ago.

Silgan president and CEO Adam Greenlee said: “Our performance in the second quarter benefited from the breadth of the Silgan portfolio in a dynamic and changing marketplace.

“We continued to advance our strategic initiatives amid rapidly evolving market conditions in part by delivering continued growth in high-value dispensing products and double-digit adjusted EBIT growth in our Metal Containers segment in the second quarter.

Greenlee added that business trends early in the second quarter were positive, but they shifted late in the quarter as many customers adjusted their financial priorities in 2023 to focus on new working capital and inventory management initiatives for the remainder of the year.

In the first two quarters of this year, Silgan’s sales decreased to US$2.84 billion from US$2.98 billion in the same period last year.

Its gross profit also declined from US$507.4 million in the first half (H1) of FY22 to US$488.1 million compared to H1 FY23.

The company reduced its adjusted net income per diluted share for FY23 to a range of US$3.40 to US$3.60 from the previous expectation of US$3.95 to US$4.15.

AMP’s gross profit drops 33% during Q2 2023

Meanwhile, Ardagh Group’s subsidiary Ardagh Metal Packaging (AMP) registered a gross profit of US$109 million in the second quarter (Q2) of financial year 2023 (FY23), down by 33% from US$164 million in FY22.

Its earnings per share (EPS) for the reported quarter, which ended 30 June 2023, declined to US$0.03 from US$0.17 a year ago. Adjusted EPS for the reported period decreased to US$0.04 from US$0.11 in Q2 FY22.

The company’s consolidated revenue totaled US$1.25 billion for this quarter, representing a loss of US$48 million or 4%, both on a reported and constant currency basis, from US$1.30 billion in Q2 last year.

This decline in revenue, according to AMP, was mainly due to the pass-through to customers of ‘lower input costs’ and ‘unfavorable volume/mix effects’.

AMP’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were down by 17% to US$151 million while the same was US$181 million in the previous year’s Q2.

The company has attributed this decline in its adjusted EBITDA to higher operating costs, which was partly offset by strong volume/mix effects.

AMP CEO Oliver Graham said: “We experienced a challenging quarter against a global backdrop of sustained inflationary and household financial pressures, impacting on consumer demand.

“Our performance in Europe proved resilient, supported by improved input cost recovery, and was modestly ahead of expectations. In North America, we recorded strong shipment growth and forward momentum, driven by the ramp-up of our contracted new capacity.”

For the first six months of 2023 (H1), until 30 June 2023, revenue decreased by 2.2% to US$2.38 billion from US$2.44 billion during H1 2022.

Gross profit this H1 was reported at US$222 million or US$0.04 EPS versus US$301 million or US$0.26 EPS last year.

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