SIG bucks trend in tough quarter for Reynolds Group

Revenue decreased at Graham Packaging, Evergreen and Closures for reasons including falling sales volumes and pricing and changes in product mix.  

The firm also said it expected to incur $700m in capital expenditures during 2013 (excluding acquisitions) for plant expansions in South America and the US and support replacement, growth and cost reduction initiatives.

Capital expenditures decreased by 15%, to $116m for the three month period ended 31 March 2013 compared to $136m for the period ended 31 March 2012. The decrease was due to lower spending at Graham Packaging partially offset by higher spending at SIG.

SIG performance​

Revenue for SIG increased by 10%, to $514m for the three month period ended 31 March 2013 compared to $467m for the three months to 31 March 2012.

SIG owns 50% of SIG Combibloc Obeikan Company, a Saudi Arabian joint venture, and 50% of SIG Combibloc Obeikan FZCO, a UAE joint venture (collectively, SIG Obeikan).

The increase in revenue was attributable to higher sales volume of $45m from all regions and a favourable foreign currency impact of $2m.

Revenue in Europe increased by or 4%, to $251m for the three month period compared to $242m for the time up to 31 March 2012, driven by higher sales volume of $7m and favourable foreign currency impact of $2m due to the weakening of the dollar against the euro.

Revenue in the rest of the world increased by 17%, to $263m for the three month period compared to $225m for the same time in 2012, related to higher volumes of $38m due to stronger demand in all regions.

Graham Packaging steady​

Revenue decreased by 1%, to $785m at Graham Packaging for the three month period compared to $795m for the period ending 31 March 2012.

The decrease was due to a fall in sales volume of $11m due to end-consumer demand for certain customers' products and lower availability of certain customers' key product ingredients, which led to decreased demand for the products.

Net other expense decreased to $13m compared to $20m for the three month period ended 31 March 2012 attributable to $8m in restructuring costs and $3m in asset impairment charges, offset by an increase of $5m in business acquisition and integration costs.

Evergreen decrease​

Evergreen revenue decreased by 3% to $398m for the three month period compared to $410m in 2012 attributable to a $15m decrease in sales volume of paper products and a $5m decrease in sales of liquid packaging board.

This was partially offset by an $8m increase in sales of cartons and the decrease in sales of paper products was due to lower market demand for certain of Evergreen's paper products.

The decrease in sales of liquid packaging board was due to $3m in lower sales volumes and an impact of $2m as pricing declined in the period.

The increase in sales of cartons was due to a rise of $5m in sales volumes, driven by higher demand in both North America and Asia, and $3m in price increases.

Fall for Closures​

Revenue in the Closures segment decreased by 5%, to $281m for the three months compared to $296m in the same period in 2012.

The decrease was attributable to an unfavourable foreign currency impact of $8m, due to the strengthening of the dollar against the Japanese yen, Brazilian real and Argentine peso, offset by the strengthening of the Mexican peso against the dollar.

Revenue decreased $7m as a result of changes in product mix and pricing related to the pass-through of resin price changes to customers and decreased equipment and spare parts sales.

Increases in sales volumes in the Asian and Middle East regions, as a result of market share growth, were offset by decreases in the North American and South American regions, due to decreased customer demand as a result of market conditions and increased competition from local suppliers.

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