Ardagh earnings rise ahead of drink cans unit spin-off

Ardagh Group, the glass and metal packaging group led by Dubliner Paul Coulson, said on Thursday that its earnings rose 10 per cent in the first quarter as the company continues to advance plans to spin off its beverage cans unit in a separate New York-listed company.

Sales at the Luxembourg-registered company rose 9 per cent to $1.77 billion (€1.46bn) in the first quarter on the same period in 2020, boosted by increased shipments in both metal and glass packaging, the passing through of higher input costs and favourable foreign-exchange translation effects into the US dollar, the currency in which it reports results.

Earnings before interest, tax, depreciation and amortisation (ebitda) jumped 10 per cent to $300 million.

Metal packaging shipments increased by 8 per cent, while glass volumes rose by 2 per cent, led by growth in North America.

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“We have made an excellent start to 2021,” said Mr Coulson, adding that the group’s $2.1 billion investment programme, unveiled late last year, “is fully on track, and we are well placed to deliver further growth over the course of the year”.

Ardagh announced in February that it plans to secure a separate US stock listing for its prized metal packaging business by merging it with a so-called blank-cheque company, called Gores Holdings V, which raised $525 million in an initial public offering (IPO) last August to do deals.

Ardagh will retain a 80 per cent stake in the resulting company, to be called Ardagh Metal Packaging (AMP), and receive up to $3.4 billion in cash as part of the deal, which is set to conclude by the end of June.

On April 1st, 2021, the transfer of Ardagh’s metal packaging business was completed and $2.3 billion was paid to Ardagh, the company said.

Canned drinks

The investment programme is mainly focused on the metal cans division. The company plans to double the unit’s ebitda to $1.1 billion by 2024, amid rising demand internationally for the likes of canned energy drinks, flavoured beverages and craft beer. Both metal and glass packaging businesses are benefitting from an ongoing shift away from plastic packaging.

In its metal beverage packaging unit in Europe, revenue increased by $51 million or 13 per cent to $436 million in the three-month period. In the Americas, revenue increased by $59 million to $503 million.

At its glass packaging Europe revenue increased by $26 million or 7 per cent to $410 million, while in North America revenue increased by $16 million to $425 million.