Irish packaging manufacturer IPL Plastics returned to the black in the first half of the year in spite of a 5 per cent decline in revenues.
The listed company reported net income of $9.5 million (€8.49 million) in the six months to the end of June, an improvement from its loss-making position for the same period in 2018.
In an update to the Toronto Stock Exchange on Tuesday evening, IPL said revenues dipped 5 per cent in the period to $310.4 million, driven by negative foreign exchange transaction impacts and "a reduction in sales volumes".
Those reductions were seen across the company's consumer packaging division in Europe, which experienced "a temporary reduction in demand from its largest customer" and in its returnable packaging division which was hindered by delays in securing agricultural bin sales. The delays were attributed to "severe adverse weather conditions" in the US.
"We made excellent progress in rebuilding margins during the second quarter, allowing us to deliver very strong earnings growth across the Group," said Alan Walsh, the company's chief executive.
Adjusted earnings
And while the gross profit margin increased to 22.4 per cent by the end of June, so too did net debt, rising by almost 53 per cent to $342.9 million. IPL expects net debt to stand at three times adjusted earnings by the end of this year, up from previous guidance of 2.7 times earnings.
Formerly known as One51, IPL provides packaging solutions primarily in the food, consumer, agricultural, logistics and environmental end markets. It operates in Canada, the United States, Britain, Ireland, Belgium, China and Mexico.
The company employs about 2,100 people and has corporate offices in Montreal and Dublin.
Looking ahead, IPL expects currency fluctuations to continue to affect it for the remainder of this year although input costs, including the price of resin, are expected to remain stable for the third quarter at least.
Shares in the company were flat in Canada on Tuesday at 9 Canadian dollars (€6.07).
