Orora has downgraded its FY26 earnings outlook for Saverglass, citing both direct operational disruption and broader market impacts stemming from the ongoing Middle East conflict.
The company now expects Saverglass FY26 underlying EBIT to be approximately €63m to €68m (AUD104m to AUD112m), excluding direct conflict-related impacts, down from previous guidance of broadly in line with FY25 EBIT of €79.2m (AUD 131m). Reported EBIT is forecast to be lower, at €52m to €59m (AUD 86.5m to AUD 98m), reflecting the combined effects of the disruption.
A key factor is the suspension of production at Saverglass’s Ras al Khaimah (RAK) facility in the United Arab Emirates. Following the escalation of the conflict on 28 February 2026, shipping routes have been closed and overland transport made inaccessible, prompting Orora to shift the site to a closed-loop ‘hot’ operation. This means the furnace will be maintained without active bottle production.
The company stressed that all team members in the region are accounted for and safe, and the glass production facility at RAK has not sustained any damage.
The RAK site accounts for around 15 per cent of Saverglass’s production capacity, with output largely dedicated to premium and ultra-premium wine bottles for North America. Production will be transferred to the group’s Acatlán facility in Mexico, with mould relocation underway to support output from late FY26.
The direct financial impact of the shutdown is estimated at €9m to €11m in 2H26 EBIT, driven by ongoing energy, staffing and fixed costs despite halted production. Orora noted that all employees in the region are safe, with some supported to return home while operations remain curtailed.
Beyond the operational disruption, Saverglass is also experiencing softer demand conditions and a shift in product mix. The company reported slower offtake in spirits and a greater-than-expected shift toward wine and champagne, alongside increased demand for lower-margin products within the spirits category. This mix shift, combined with reduced volumes, is expected to reduce 2H26 EBIT by a further €11m to €16m.
Orora stated there is no change to FY26 guidance for its Cans business or the Gawler glass facility. The company’s balance sheet remains strong, with leverage expected to stay below 1.5x, although its on-market share buyback has been paused as it monitors ongoing developments.
