European demand drives Rexam’s results
Rexam is considering options for capital expenditure opportunities in both Finland and Russia following the release of the company’s half-year results.
The company reported a 19% increase in underlying pre-tax profits to £236m for the first half of 2011.
Strong beverage can volume growth in Europe saw volumes grow 6% as cans continued to gain an increasing share of the beverage packaging mix.
Rexam’s own volumes increased 7% led by good growth in standard cans as well as share gains in a number of key markets. The company also benefited from the continued growth of specialty cans across Europe with volumes increasing 7%, driven largely by the strong growth in energy drinks in Europe and also those filled in Europe for export.
The company’s total sales amounted to £2.496m for the first six months of the year. Rexam’s total profit for the period amounted to £132m, an increase of £30m on the same period in 2010.
The company remains confident about the market in Russia, as trading in the country was strong and ahead of expectations. Against weak comparators, Rexam’s volumes grew 15% as the Russian economy recovered on the back of higher oil prices.
The results were not so positive in North America where volumes were down 14% impacted by the contract losses announced last year. Speciality cans grew strongly, up 24%, driven mainly by increased consumption of bigger format cans for beer and iced teas.
The beverage can market in Brazil grew 2% in the first half of the year according to official industry figures while volumes fell by 1%.
Commenting on the results, Rexam chief executive Graham Chipchase said: “”We are pleased with the continued progress of the business in the first half. Beverage cans traded better than expected driven primarily by our business in Europe. The mixed performance in plastic packaging continues to be a challenge in some areas and we are focused on improving the results in this business. Looking ahead, we will concentrate on return on capital, costs and cash generation and expect continued good performance for the rest of the year.”