Ball Corporation posts a 48% plunge in net earnings attributed to weakening prices of aluminium packaging products

Ball Corporation, the world's leading provider of innovative and sustainable aluminium packaging for beverage, personal care, and household products, has announced its third quarter 2023 results, disclosing net earnings attributable to the corporation of $203 million or diluted earnings per share of 64 cents on sales of $3.57 billion, compared to $392 million net earnings or $1.24 diluted earnings per share against $3.95 billion sales during the corresponding period of the last year. That reflected a 48 per cent plunge in net earnings against a relatively lesser rate of fall in sales by 9.6 per cent. Lower selling prices of products due to the overall economic downturn across the globe could be a reason.

Net earnings in nine months of the year amounted to $553 million on sales of $10.63 billion compared to $664 million on sales of $11.80 billion. Ball's third-quarter and year-to-date 2023 comparable earnings per diluted share were 83 cents and $2.13, respectively, versus earnings per diluted share of 75 cents or $2.34 during the corresponding period of the last year.

Comparable operating earnings from the beverage packaging segment in North and Central America also decreased in Q3 2023 by 4.39 per cent from $205 million to $196 million. Sales stood at $1.54 billion in Q3 of this year compared to $1.80 billion in Q3 2022, down by 14.44 per cent Y-o-Y, attributed to lower shipments and aluminium costs.

Ball's operating earnings from the beverage packaging in the Middle East and Africa market stood at $103 million on sales of $902 million compared to the previous year's earnings of $82 million on sales of $1.03 billion. South American market marked no exception but a fall in earnings from the beverage packaging segment from $67 million to $61 million. But sales were higher in Q3 2023 at $489 million versus $466 million.

Earnings from the aerospace segment for the third quarter of 2023 were recorded at $46 million on sales of $460 million compared to $47 million on $477 million sales in Q3 2022. This data is indicative to the fact that earnings and sales ratio was better in Q3 2023 than in the previous year as the aluminium demand in the aerospace sector recovered during the said period. New contracts were won, while at the same time backlog remained strong at $2.9 billion.

Daniel W. Fisher, chairman and chief executive officer of Ball Corporation, said: "We delivered strong third-quarter results. Improved operational efficiencies across our global aluminium packaging operations, inflationary cost recovery and benefits of cost-out actions offset higher interest costs and challenging year-over-year volume comparisons. During the third quarter, the initial phase of sequential improvement in our quarter-over-quarter global beverage can shipments emerged and was driven by double-digit volume growth in our Brazilian beverage can business. In North America, we further optimized our plant network to ensure proper supply/demand balance while continuing to enable access to high-quality, innovative aluminium beverage cans and bottles at a growth cadence appropriate for current market conditions and our customer mix. These actions and improved plant performance, in addition to deploying the aerospace sale proceeds to significantly reduce our leverage and increase share repurchases, serve as catalysts for higher shareholder returns."

Howard Yu, executive vice president and chief financial officer, said: "Our teams are doing an excellent job of managing costs, working capital and short-term customer demand and supply chain issues. We remain well-positioned to deliver free cash flow of approximately $750 million in 2023 , utilizing existing cash on hand. We are prepared to address our near-term debt maturities in advance of receiving proceeds from the announced aerospace sale. Looking ahead, increased free cash flow generation and approximately $4.5 billion of after-tax proceeds from the aerospace sale are intended to be used to immediately reduce debt by approximately $2 billion, driving leverage to in the range of 3.0x net debt to comparable EBITDA, and approximately $2 billion of proceeds are intended to be used to increase the return of value to shareholders via share buybacks and dividends moving forward."