Graham Packaging Holdings, the US-based plastic packaging provider, has said its worldwide unit sales increased 4 per cent in the second quarter of 2002 and 7 per cent in the first six months of 2002, compared to the same periods last year. However sales for the first six months of the year were down 3 per cent overall.
Sales in dollars declined compared to the same periods last year, primarily due to a decline in the average price of resin, the primary raw material utilised to produce the units, combined with the company's restructuring process in Europe, which involves the sale or closure of six locations.
The European restructuring would have lowered 2001 sales by approximately $60 million had it been in place at the beginning of 2001, the company said. The restructuring is helping the company focus on key strategic customers, those with whom it has on-site manufacturing operations utilising the most competitive technology.
Chief Financial Officer John E. Hamilton said worldwide adjusted earnings before interest, taxes, and depreciation (adjusted EBITDA) in the second quarter were 18 per cent ahead of the same period last year.
The earnings were achieved on worldwide sales of $236 million (€239.3m), 4 per cent below the second quarter of 2001. Net income for the quarter totalled $14 million, compared to a net loss of $1.2 million in the same period last year. Excluding locations impacted by the European restructuring, sales in the second quarter of 2002 would have been approximately equal to the sales in the same period of 2001 and unit volume would have grown 11 per cent.
"We continue to be very pleased with the improvement in earnings," Hamilton said. "The economic environment of the past two years has necessitated a strong focus on improving the operating costs of our business through restructuring and improved utilisation, primarily in Europe. Although we currently expect these and other restructuring activities will result in total non-recurring charges of approximately $20 million in 2002- $6.4 million of which was incurred in the first half of 2002- the benefits of these efforts are beginning to be reflected in the financial results of the company."
For the first six months of 2002, worldwide sales were $468 million, 3 per cent below the same period last year. Adjusted EBITDA for the first six months was more than 18 percent above 2001. Net income for the first six months of 2002 totaled $17.2 million, compared to a net loss of $7.4 million in the same period last year. Excluding locations impacted by the European restructuring, sales for the first six months of 2002 would have increased approximately 1 percent on unit growth of 14 per cent as compared to the same period in 2001.