Ardagh Group reports $155m loss for first half, weighed down by restructuring spend

Ardagh Group, one of the world’s largest metal and glass packaging companies, has reported a pretax loss of $155 million (€140.7m) for the first six months of the year. The losses incurred by the group, which makes drinks cans and bottles for customers ranging from Coca-Cola to Heineken, compared to a $50 million pretax profit for the same six months in 2022.

Ardagh Group, led by Paul Coulson, owns 100 per cent of Ardagh Glass Packaging (AGP) and 76 per cent of Ardagh Metal Packaging (AMP). It operates 63 packaging facilities across the Americas, Europe and Africa.

Revenues across the group reached $2.45 billion in the second quarter of 2023, and $4.7 billion for the first half of the year, showing little change from revenues of $2.44 billion and $4.48 billion over the same periods last year.

Ardagh Group’s pro forma adjusted earnings before interest, tax, depreciation and amortisation (ebitda) in the six months to June 30th, 2023, increased by $63 million, or 10 per cent, to $722 million, compared with $659 million in the same six months last year.

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The group’s ebitda margin reached 15.4 per cent in the six months to June 30th, 2023, up from 13.6 per cent a year earlier.

For the three months to June 30th the group reported a loss before tax of $100 million, down from a profit of $16 million recorded in the same quarter of 2022.

The group’s bottom line was hit by a jump in spending on exceptional items, which in the first six months of 2023 reached $198 million, up from $59 million over the same period last year. A large proportion of this spending related to the closure of two glass production facilities in Louisiana and North Carolina in the US, and the shutting down of steel lines at a production facility in Weissenthurm in Germany as it transitioned to producing solely aluminium cans.

It included $71 million in restructuring costs, and $61 million related to the impairment of property, plant and equipment across the group following the closures. Exceptional spending also included $23 million in start-up related costs, primarily in AMP Americas ($14m) and AMP Europe ($7m).

The group has been investing heavily in recent times in ramping up production in its beverage cans business to take advantage of rising underlying growth in demand for recyclable packaging products on both sides of the Atlantic.

Ardagh’s glass and metal manufacturing operations saw contrasting trends in revenues across different regions. In the second quarter AGP Europe & Africa and AMP Europe saw revenue increases of 8 per cent and 4 per cent respectively, due to the pass through to customers of higher input costs and favourable volume/mix effects.

Meanwhile AGP North America and AMP Americas saw revenues decrease by 12 per cent and 9 per cent respectively with less favourable volume/mix impacts, as the glass packaging branch of the company felt the impact of disruption in the North American beer market, and Ardagh’s metal packaging operation passed lowering input costs through to customers.