Graphic Packaging has reported a 8% drop in its net sales to $1.09bn for the second quarter of 2017, compared to $1.10bn reported in the prior year period.
Though sales had fallen by 8%, the company stated that its net tons sold increased by 1.7%, which was the result of an acquisition and slightly positive core volumes.
Its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was $170.6m, compared to $195.2m for last year. It also reported a reduction in net profit from $77.8m last year to $42m for the year.
Earnings per share for the period had also fallen from $0.24 last year period to $0.14 for this year. Adjusted earnings for the year were $0.15, compared to $0.19 during the previous year. The company has an average of 311.1m shares.
Graphic Packaging stated that net income suffered a negative impact of $4.4m (net of a $1.7m tax benefit) in business combinations and other special charges. When these changes are adjusted for, the net income is $46.4 or $0.15 earnings per share.
Graphic Packaging president and CEO Michael Doss said "Our second quarter Adjusted EBITDA met our expectations at $171 million compared to $195 million in the prior year period. Net Tons Sold were up 1.7%, reflecting an acquisition and slightly positive core volumes.
“We successfully completed our bi-annual maintenance cold outage at the West Monroe, Louisiana mill. The quarter was negatively impacted by accelerating commodity input costs, primarily recycled fiber, and the planned downtime costs."
"We are executing price increases to offset the unprecedented recycled fiber input cost inflation and expect margins to improve from our pricing actions during the second half of 2017 and in 2018. Our focus on meeting cash flow commitments, growing cash flow, and returning more of it to stockholders over time has not changed.
“We remain committed to a balanced capital allocation strategy, which includes reinvesting in our business to drive strong cash returns on cash invested, strategic acquisitions at compelling post-synergy multiples, and returning cash to stockholders through dividends and share repurchases."
The company claims to have returned $43m to its shareholders in the form of dividends and share repurchases during this year’s second quarter.
