Packaging Corporation of America reported second quarter 2018 net income of $187 million, or $1.97 per share and net income of $197 million, or $2.08 per share, excluding special items. Second quarter net sales were $1.8 billion in 2018 and $1.6 billion in 2017. Reported earnings include $.11 per share of special items expense in the second quarter of 2018, primarily for certain costs related to discontinuing paper operations associated with the previously announced conversion of the No. 3 paper machine at our Wallula, Washington mill to linerboard, and no special items expense in the second quarter of 2017. Click Read More below for additional information.
Net sales for the fourth quarter increased by 2% compared with the same quarter of the previous year, mainly as a result of improved selling prices.
EBITDA was SEK 923 million (693) which was better than the same quarter of the previous year due to price increases and lower fixed costs.
Adjusted EBITDA was SEK 950 million (898) which was 6% better.
EBITDA was affected by costs of SEK 140 million (135) for planned maintenance shutdowns.
The operating margin was 9%; the adjusted operating margin was 11%.
Earnings per share amounted to SEK 1.78 (0.66).
Record high net sales and all financial targets fulfilled.
Net sales increased by 3%, while sales volumes were in line with the previous year.
Favourable price and currency developments were offset by higher variable costs – EBITDA increased by 4%, with an EBITDA margin of 17%.
The earnings impact from planned maintenance shutdowns in 2017 was SEK 657 million, which was SEK 84 million higher than in 2016 and SEK 62 million higher than expected.
Project costs for investments at Gruvön and Skärblacka had an impact of SEK 150 million (325) for 2017.
Earnings per share amounted to SEK 7.91 (7.33).
“Our strong position in a growing market is enabling us to continue reporting high growth and stable earnings. Strong demand is continuing, resulting in increased sales, which are up by just over 3 percent on the previous year. Production volumes are at record-high levels, despite recurring availability problems. Of course, we are not satisfied with being unable to meet the demand that exists, and we are therefore now intensifying our action plan to boost production stability. Going forward, ensuring operating excellence will be one of my focal areas.
Our investments for long-term growth have proved to be more expensive than expected. However, the projects are continuing to progress and I believe our initiatives, both to meet customer demand and to increase operational stability, will generate results over the next few years”
EBITDA for the full year rose by 4% to SEK 3 760 million. Sales volumes were unchanged compared with the previous year, while net sales increased by 3% owing mainly to increased prices and a positive currency impact. Variable costs increased, in part because of external pulp purchases at the start of the year relating to the rebuild of Rockhammar.
All business areas are continuing to deliver stable earnings. Despite inadequate Consumer Board production availability, growth was 3%, which is in line with the Group’s overall target. Managed Packaging, within Corrugated Solutions, is continuing to deliver strong sales growth – up 50% on the previous year. Packaging Paper delivered record earnings, despite lower capacity owing to the relocation of the MG machine from Tervasaari to Skärblacka.
The strong performance in the market by all business areas is expected to continue. We are seeing favourable order levels and opportunities for further price increases, particularly in Packaging Paper and Corrugated Solutions.
The positive picture is reinforced by the fact that we are correctly positioned, with a broad offering of innovative and sustainable packaging and solutions. Demand for a comprehensive offering in which the material plays a key role is growing. Packaging is gaining an increasingly important role in many brand owners’ efforts to make their products more competitive. This continues to give us great confidence in our products and our development.
more detail at: https://www.billerudkorsnas.com/media/press-releases/2018/year-end-report-januarydecember-2017