Ceepackaging

Corporate

Ball reports USD281.3m profit

Fourth quarter 2007 net earnings were $33.3 million, or 33 cents per diluted share, on sales of $1.76 billion, compared to $48.3 million, or 46 cents per diluted share, on sales of $1.59 billion in the fourth quarter of 2006.
In both 2007 and 2006 results included costs from business consolidation activities and significant non-operating items. Fourth quarter 2007 results included net after-tax costs of approximately $27 million, or 27 cents per diluted share, for business consolidation primarily in the company’s food and household products packaging, Americas, segment. Full-year 2007 results included the fourth quarter business consolidation costs and a third quarter after-tax charge of $51.8 million, or 50 cents per diluted share, related to a customer settlement.
Fourth quarter 2006 results included net after-tax costs of $20.2 million, or 19 cents per diluted share, from business consolidation activities, reduced by a one-time tax gain. Full-year 2006 results included property insurance proceeds resulting from a fire at a plant in Germany, offset by business consolidation costs, for a net after-tax gain of $25.6 million, or 24 cents per diluted share. Details of the business consolidation activities, customer settlement and property insurance gain can be found in Note 2 to the unaudited consolidated financial statements that accompany this news release.
R. David Hoover, chairman, president and chief executive officer, said 2007 was a record year for Ball in terms of operating results.
“On a comparable basis, our diluted earnings per share were $3.50 in 2007, up 21 percent from our previous record of $2.90 in 2006. This came despite a difficult fourth quarter comparison where, also on a comparable basis, we earned 60 cents per diluted share in the period in 2007 versus 65 cents in the fourth quarter of 2006,” Hoover said.
“While we generally are pleased with our results from 2007, we have identified and are executing on numerous initiatives that we believe will lead to further improvements in 2008 and better position us for the longer term,” Hoover said. “Earlier this week our board of directors elected John A. Hayes as executive vice president and chief operating officer of Ball Corporation. John has done a superior job of leading our operations in Europe in recent years. We look forward to having him as chief operating officer for all of our businesses.”
Metal Beverage Packaging, Americas
Metal beverage packaging, Americas, segment operating earnings were $213.6 million in 2007 on sales of $2.76 billion, including an $85.6 million charge for a customer settlement, compared to $269.4 million on sales of $2.60 billion in 2006. For the fourth quarter, earnings were $57.8 million on sales of $666.6 million in 2007, compared to $75.9 million on sales of $611.9 million in 2006.
“Continued strong demand for specialty size cans contributed to overall results in our metal beverage packaging, Americas, segment in 2007,” Hoover said. “Work is progressing on schedule to install a new 24-ounce can production line in our Monticello, Ind., beverage can plant. That capacity will come on stream later this year to help us keep up with the growing demand for that particular container, primarily for energy drinks and beer.”
Ball’s board of directors approved yesterday the corporation’s participation in a one-line metal beverage container plant in southeastern Brazil. The plant will be part of Latapack-Ball Embalagens, Ltda., Ball’s 50-50 joint venture can company in Brazil. Its capacity will be 900 million cans per year and can be expanded to 2 billion cans per year as demand grows. The plant will be financed entirely by cash flows from the joint venture, and production is expected to begin in mid-2009.
Metal Beverage Packaging, Europe/Asia
Metal beverage packaging, Europe/Asia, segment results in 2007 were operating earnings of $256.1 million on sales of $1.9 billion, compared to $268.7 million on sales of $1.51 billion in 2006, which included a pre-tax property insurance gain of $75.5 million related to a fire in a German plant. For the fourth quarter, operating earnings in 2007 were $37.6 million on sales of $455.5 million, compared to $33 million on sales of $352.6 million in the fourth quarter of 2006.
Ball announced today plans to build a new beverage can manufacturing plant in Poland in order to meet the rapidly growing demand for beverage cans there and elsewhere in Central and Eastern Europe. The plant will be built in Lublin, near the borders of Belarus and Ukraine. It will initially have one production line with an annual capacity of approximately 750 million cans per year and is expected to begin production in the first half of 2009.
“Our metal beverage packaging, Europe/Asia, segment had a strong 2007, with improved results throughout Europe and in China, and we have numerous growth opportunities,” Hoover said. “We currently are speeding up certain production lines in Germany and Poland in advance of the busy 2008 summer selling season. In addition, during the fourth quarter of 2007 we announced plans for a beverage can plant in India that will use existing manufacturing equipment.”
Metal Food & Household Products Packaging, Americas
Metal food and household products packaging, Americas, segment results for 2007 were a loss of $8 million on sales of $1.18 billion, including business consolidation costs of $44.2 million, compared to $2.4 million on sales of $1.14 billion in 2006. For the fourth quarter of 2007, segment results were a loss of $33.4 million on sales of $271.1 million, compared to a loss of $23.2 million on sales of $288.1 million in the same period of 2006. The fourth quarter and full-year 2007 results included business consolidation costs of $44.2 million. The fourth quarter and full-year 2006 results include business consolidation costs of $33.8 million and $35.5 million, respectively.
“Work has begun on the further restructuring announced early in the fourth quarter of our metal food and household products packaging, Americas, segment,” Hoover said. “The restructuring plan includes closing aerosol can production plants in California and Georgia and exiting the custom and decorative tinplate can business. Even though the anticipated annualized cost savings of $15 million from this restructuring are not expected until 2009, we believe other improvements we have already made and continue to make in pricing and operating efficiencies will lead to much improved performance in this segment in 2008.”
Plastic Packaging, Americas
Plastic packaging, Americas, segment results for 2007 were operating earnings of $25.9 million on sales of $752.4 million, compared to $28.3 million on sales of $693.6 million in 2006. For the fourth quarter, earnings in 2007 were $8.8 million on sales of $172.1 million, compared to $10 million on sales of $172.6 million for the same period in 2006.
“Plastic packaging, Americas, segment results were down slightly in 2007 from 2006 and are at unacceptable levels,” Hoover said. “We will continue to emphasize our heat set and other higher margin plastic containers while pursuing price increases for commodity plastic containers for water and carbonated soft drinks, where returns are well below our cost of capital and must improve.”