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Huhtamaki reduced sales in the second quarter by 8%

July 31/2020

MOSCOW (MRC) - Finnish company Huhtamaki (Finland), one of the largest European suppliers of food and beverage packaging, reduced sales in the second quarter by 8%, the company said.

Low demand for food packaging in restaurants and cafes during the COVID-19 pandemic affected the company's sales in the second quarter of 2020.

Thus, the sales of the Finnish packaging manufacturer Huhtamaki ("Huhtamaki") in the second quarter of 2020 decreased by 8% - to EUR797 million, as due to the pandemic the demand for its products from restaurants and cafes sharply decreased. The company's profit decreased from EUR53.3 million to EUR46.3 million.

Adjusted earnings before interest and taxes (EBIT) fell 10% to EUR70.1 million. Despite very weak second quarter results, stronger first quarter results helped Huhtamaki end the first half with modest profit growth and only marginal sales decline.

Sales of paper and plastic disposable tableware for restaurants and cafes in the food service segment fell 31% to EUR167.2 million, while adjusted EBIT declined 72% to EUR6.2 million.

In the North American region, also hit by the coronavirus shutdown, sales fell 3% to EUR296.1 million, but adjusted EBIT rose 17% to EUR37.9 million on lower energy, fuel and polymers. Huhmataki noted that demand for finished food packaging in the flexible and woven packaging segments remains robust despite COVID-19.

The company's sales of flexible plastic packaging rose 6% to EUR263.1 million, driven by strong demand in most markets, especially higher than usual in Europe. At the same time, Adjusted EBITDA declined 5% to EUR19.1 million due to COVID-19 production interruptions in India and the UAE.

Fiber Packaging sales declined 2% to EUR75.7 million, but adjusted EBIT jumped 12% to EUR8.5 million, driven by higher volume and prices. Earlier it was reported that in December last year Huhtamaki put into operation a new line in the city of Ivanteevka (Moscow region). The commissioning of new equipment is part of an investment project that was presented in November 2018 and valued at USD7 million.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Huhtamaki is a manufacturer of food grade consumer packaging made from paper, molded paper fiber and plastic. The company has 76 factories in the world with more than 16 thousand employees. Since 1994, one of the two Russian factories Huhtamaki has been operating in Ivanteevka for the production of disposable tableware and packaging made of plastic, paper and molded paper fiber for food and eggs. This plant is the largest company in Eastern Europe, as well as the largest producer of egg packaging in Russia and the CIS. The total investment in the plant is EUR125 million. In Russia, "Huhtamaki" has two production sites - in Ivanteevka (Moscow region) and in Alabuga (Tatarstan), where it produces packaging for catering and packaging for eggs.
Author:Anna Larionova
Tags:PS, PE, packaging, Huhtamaki.
Category:General News
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