GLOBAL: Weaker drinks can sales dents Rexam
Global packaging giant Rexam has seen sales dented by weaker demand for beverage cans in the first quarter of 2009, but said results were in-line with its expectations.
Weaker-than-anticipated demand for drinks cans across Europe, and notably Russia, dented sales in the first three months of the year, compared to the same period of 2008, Rexam said in a trading statement yesterday (7 May).
As one of the world's largest beverage can suppliers, Rexam's performance is an indicator of the health of global drinks markets in the economic downturn.
The UK-based group also reported ongoing decline in demand in North America, although less severe than in the fourth quarter of last year. Volumes in South America, meanwhile, were "robust", it said, without giving specific figures.
Operating profits for the quarter were broadly flat with the year before, largely due to foreign currency gains, Rexam said.
"Rexam's first quarter underlying operating profit was in-line with last year, albeit with the benefit of foreign exchange translation," said CEO Leslie Van de Walle, adding that the group's beverage can business "is holding up reasonably well".
The firm said: "In our cans business globally, we have reduced inventory levels in the first quarter to meet market demand and optimise cash flow, although this has resulted in some curtailment costs," the firm said.
"We expect the second half of 2009 to improve on the first half as we head into the traditionally busier summer season."
Rexam said it remains committed to delivering positive free cash flow after dividends in 2009.
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