AUSTRIA – Cartonboard and folding cartons giant Mayr-Melnhof Group (MM) has reported consolidated sales of €2.18 billion, slightly below the previous year’s figure (H1 2022: €2.22 billion).
A primarily volume-related decline in the division MM Board & Paper was offset by acquisition- and price-related increases in the division MM Packaging.
Operating profit decreased by €181.0 million from €285.0 million to €104.0 million. This decline primarily results from extensive market- and capex-related downtime at MM Board & Paper. The Group’s operating margin was therefore at 4.8 %.
Financial income amounted to €3.7 million, compared to €2.3 million in H1 2022. The increase in financial expenses from €-15.6 million to €-24.7 million is due to higher interest expenses for Schuldscheindarlehen and financing of accomplished acquisitions and organic growth projects.
“Other financial result – net” changed from €-1.6 million to €-5.9 million, in particular owing to currency translation.
At €77.2 million, profit before tax was also lower than the previous year’s figure (H1 2022: €270.2 million).
Income tax expenses amounted to €13.9 million after €64.4 million in the first half of the previous year, resulting in an effective Group tax rate of 17.9 %.
Profit for the period decreased from €205.8 million to €63.3 million.
Peter Oswald, MM CEO, said: “The development of the MM Group in the first half-year reflects the continuing weak demand in the cartonboard and paper sector after the record year 2022.
“As already communicated in mid-June, the significant decline in results is attributable to the weak volume development in the division MM Board & Paper.
“In contrast, the division MM Packaging was able to record an overall positive performance with the successful integration of last year’s acquisitions in the resilient pharmaceutical packaging sector and factoring in one-off restructuring costs.”
WestRock reports fiscal Q3 net sales down 7.2%
Elsewhere, American corrugated packaging company WestRock has posted net sales of US US$5.12 billion for Q3 ended June 30, 2023.
The year-over-year decline in net sales was driven primarily by a US$545 million, or 33.8%, decrease in Global Paper segment sales, which was partially offset by a US$183 million, or 7.7%, increase in Corrugated Packaging segment sales.
The increase in segment sales in the Corrugated Packaging segment in the current year quarter includes the operations of its former joint venture in Mexico since its December 2022 consolidation.
Net income declined in the Q3 of fiscal 2023 to US$202 million compared to the prior year quarter primarily due to lower volumes excluding the Mexico acquisition, the impact of increased economic downtime and planned maintenance outages, higher restructuring costs, increased non-cash pension costs, higher net interest expense and business systems transformation costs.
These costs were partially offset by the impact of higher selling price/mix, increased cost savings, contribution from the Mexico acquisition, net cost deflation and the gain on sale of an unconsolidated entity.
Consolidated Adjusted EBITDA decreased US$204 million, or 20.2%, year-over-year, to US$802 million primarily due to lower Global Paper segment Adjusted EBITDA that was partially offset by higher Adjusted EBITDA in our Corrugated Packaging segment.
David B. Sewell, CEO said: “We delivered impressive results under challenging market conditions. Our accelerated transformation strategy is exceeding expectations.
“We expect to exit the year with a cost savings run-rate of over US$450 million. We remain focused on partnering with our customers, streamlining our portfolio, investing in our assets and further reducing costs.
“I’m excited about our execution as we continue to transform WestRock into a more efficient and more profitable company.”
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