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2007-04-19 News Release
Constantia Packaging 2006 record sales, earnings Constantia Packaging Group reports a significant increase in operating income for 2006 from both the Flexible Packaging and Corrugated Board segments.
For the eighth consecutive year, Constantia Packaging Group (CPG) recorded
a significant increase in operating income in 2006. The robust gains in
operating income and margins extended across both the Flexible Packaging
and Corrugated Board Packaging segments. In 2006, CPG recorded consolidated sales of more than €1 billion for the first time, as they increased by 6.5% from €991.6 million to €1,056.2 million. Non-Austrian sales accounted for approximately 92% of the consolidated total. The rest of Europe (excluding Austria) is the Group’s main market, accounting for 82% of total sales. The Flexible Packaging segment accounts for approximately three fourths of consolidated sales. With 36 production facilities in 14 countries, this segment generated €766.3 million in sales last year, up 2.8% from €745.1 million the previous year. The Corrugated Board segment, meanwhile, has 13 production facilities in nine countries. Its sales increased by 17.6% from €247.3 million to €290.8 million last year. In 2006, the first effects of the business portfolio streamlining were also felt. This initiative will be pursued in 2007.
*PHOTO - Consolidated net income increased by 10.2% from €45.7 million to €50.3 million. The key factors behind this increase were the Group’s operating results as well as the increased income contribution from its equity interest in Austria Metall AG (AMAG), Ranshofen, a leading manufacturer of extruded and cast aluminum products for the processing industries. Meanwhile, the increase in the corporate tax expense, which was the result of positive earnings contributions from subsidiaries in high-tax countries, had a dampening effect on net income. In the Flexible Packaging segment, the bulk of the investments focused on Constantia Teich’s new rolling mill in Muhlhofen, completed late last year, and the expansion of the Constantia Patz facility in Natschbach-Loipersbach into a pharmaceuticals packaging center.
The Corrugated Board segment invested in new equipment. They included a second corrugated board machine for Duropack Trakia, Bulgaria, and container line equipment with three-color printing at Duropack Turpak Obaly in Slovakia to produce heavy duty corrugated board packaging for the rapidly growing automobile and electronics industry. On March 23, 2007, a framework agreement was reached with respect to the acquisition of the 40% equity interest in Austria Metall AG , Ranshofen, held by Klaus Hammerer GmbH. The completion of the final agreement and transfer of control is expected in the second half of 2007.
In the Flexible Packaging segment, Constantia Packaging strengthened its position as a global player, with an emphasis on Europe and promising emerging markets. The subsidiaries making up this segment are key partners to manufacturers in the dairy, pharmaceuticals, confectionary and beverage label sectors. Constantia Packaging further strengthened its Eastern European market position through the acquisition of a 70% equity interest in ColorCap, a leading Polish manufacturer of flexible packaging. It also acquired Hueck Folien, a leading European producer of high-quality, flexible packaging for the pharmaceutical and food sectors. This newly acquired company, which has production facilities in Germany, Belgium, the United States and Uruguay, also enhances Constantia Packaging’s market position in the U.S. market. Constantia Packaging also entered the Romanian market through yet another acquisition of a majority interest. Constantia Haendler & Natermann, Germany, acquired 60% of Novis, the Romanian market leader for paper labels in the beer and soft drinks sector. In 2006, the Corrugated Board segment rapidly integrated Trakia Papir AD, the Bulgarian market leader acquired in late 2005, into the Group’s organizational structure and thereby secured a leading position in the Eastern European market. Constantia Packaging AG stock is listed on the Prime Market of the Vienna Stock Exchange. In 2006, the stock price posted gains once again. The year-end closing price of €37.55 was up 13.8% from €33.00 at end-2005, earnings per share +10.2%, dividend +2.6%. The stock also continued to rise in the first quarter of 2007. We remain cautiously optimistic with respect to continued growth in the packaging industry and the overall market in 2007. In this environment, Constantia Packaging is well positioned despite growing competitive pressure, and the Executive Board therefore expects further sales and earnings increases. This goal will be achieved through the consistent implementation of our strategy. Additional information and full details of the report are available on
the Company's website.
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