Growth in sales volumes in Asia-Pacific, North America and Europe helped Glass giant O-I, in its third financial quarter, to offset a sharp decline in South American sales and achieve its first year-on-year growth in volumes in seven quarters.
The result was also achieved despite a weakening in the Australian dollar, which the company described as a “headwind” impacting its financial results.
The company reported a fiscal third quarter profit of $US132 million ($A139 million), a 43 per cent increase compared to profit of $US92 million in the third quarter of 2012.
Net sales rose slightly to $US1.78 billion, due primarily to strength in Europe.
Overall global volumes increased two per cent, the company's first year-on-year rise in almost two years.
“Growth in sales volume in Europe, North America and Asia-Pacific outweighed the decline in South America,” the company's chairman and chief executive officer, Al Stroucken, said.
In South America, a broad macroeconomic slowdown and a general strike in Colombia dampened demand, he said.
The fluctuating Australian dollar, lately declining in value compared to record highs in recent years, also impacted results.
“Currency was a headwind as the weakened Brazilian real and Australian dollar more than offset a stronger euro,” the company said.
By comparison, results from its European and North American operations proved particularly pleasing.
“Europe volume increased seven per cent on growth in wine, food and beer,” O-I said.
“The company's efforts to win back wine customers continued to show traction across southern Europe. A delayed harvest in Europe shifted volumes into the third quarter, allowing food volumes to record double-digit gains.
“Following adverse weather in the second quarter, beer volumes in the third quarter increased year-on-year in both Europe and North America. Volume growth in North America was also driven by non-alcoholic beverages.”
Stroucken was cautious, however, on the prospects for continued growth in North America and Europe.
"We expect market demand in North America and Europe to be sluggish, but stable,” he said.
He said, however, that any weakening in growth should be offset by the company's ongoing global structural cost reduction and European asset optimisation programs.
O-I has recorded its first increase in global sales volumes in almost two years, thanks to increased beverage demand in Europe and North America.
