Rexam has posted a slide in profits for the first half of this year as aluminium costs soar.

The global packaging group and beverage can maker said today (24 August) that pre-tax profits for the six months to 30 June slid 3% on the corresponding period a year earlier to GBP137m (US$259.4m) from GBP141m last year. Sales from ongoing operations, however, jumped by 20% in the half-year to GBP1.8bn.

"During the first half of 2006, Rexam delivered strong top-line growth, good cash flow, significant market share gains and a solid profit performance," said Rolf Börjesson, Rexam's chairman. "Our ongoing pricing, innovation and cost efficiency initiatives are proceeding according to plan."

Börjesson noted, however, that the industry is facing a "challenging" cost climate, but added that trading remains "in line with our expectations".

"We expect to make progress in the second half," he continued. "Looking forward, we will focus on managing our margins through pricing and cost efficiencies and strengthening our businesses through our strategy for organic and acquisitional growth."

Among Rexam's customers for cans are Coca-Cola Co., Heineken and Carlsberg. The company is also the exclusive supplier of cans for Red Bull.

Separately, Rexam said that it will build a second can production facility in Russia. The plant, located in the Urals, is expected to come on-stream in mid-2008, the company said. Earlier this year, Rexam announced that it was spending over GBP45m on a second can making plant in Austria exclusively for Red Bull.