Elopak reports mixed results for Q2 FY24 amid operational challenges

NORWAY – Elopak, a global supplier of packaging solutions, reported its Q2 FY24 financial results, reflecting mixed performance as the company navigates operational challenges and economic headwinds.

For the quarter ending June 30, 2024, Elopak posted a revenue of €288 million (US$316.49 m), a modest increase of about 3.8% compared to €278.1 million (US$305.61m) in the same period last year.

However, net income declined to €15.9 million (US$17.47m), down from €18.5 million (US$20.33m) in Q2 2023. This dip translated to basic earnings per share of €0.06, compared to €0.07 a year ago.

Despite the challenges, Elopak achieved an EBITDA of €43.8 million (US$48.13m), marking a 15.2% year-over-year increase.

The company credited its strong performance in core markets, particularly in Northern Europe and the Americas, for this growth.

However, the aseptic business, especially in the juice segment, struggled with consumption declines in Europe and the US, leading to stagnant growth.

Elopak also successfully issued a bond of NOK 2.5 billion (US$232.53m), underscoring investor confidence in the company’s financial health.

The company maintained a leverage ratio of 1.9, even after a significant dividend payout and continued investments, including constructing a new plant in Little Rock, Arkansas, which is expected to enhance production capacity.

However, the company faced significant operational disruptions, particularly an incident with a supplier in the USA, which impacted the quarter’s performance.

Economic conditions in Southern Europe also led to reduced demand for higher-cost packaging, further challenging the company’s growth.

Elopak’s CEO, Thomas Körmendi, noted the mixed results in the aseptic business, highlighting better performance in the milk segment in North and South Europe, but acknowledged the difficulties in the juice market.

Looking ahead, the company plans to discuss long-term capacity expectations for its new Little Rock plant at its Capital Markets Day on September 4th while continuing to address the ongoing operational challenges.

For the first half of 2024, Elopak reported revenue of €580.3 million (US$637.70m), a slight increase from €561.4 million (US$616.93m) in the same period last year. Net income rose to €37.4 million (US$41.10m) from €34 million (US$37.36m).

The results reflect a company that, while facing several hurdles, continues to make strategic investments to secure its future growth.

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