Global packaging company Sonoco has posted net income of $114.74m in the second quarter (Q2) of 2023, a decline of 12.9% compared with $131.76m in Q2 2022.
The net income attributable to the company, after excluding net income attributable to non-controlling interests, was $114.64m, down by 13% from $131.67m in Q2 a year ago.
For this quarter, which ended on 2 July 2023, the generally accepted accounting principles (GAAP) diluted earnings per common share for the reported three months also plummeted by 13% to $1.16 from $1.33 in the previous year’s Q2.
Sonoco’s net sales declined by 11% to $1.70bn from $1.91bn during the same period a year ago. This decline in net sales was due to lower volumes.
The company’s GAAP operating profit totalled $187.85m, down by 5% from $197.47m in 2022.
It decreased mainly due to lower overall volume and mix, partially offset by lower costs in terms of acquisition and restructuring, along with gains on asset sales, higher price/cost and productivity.
In Q2 2023, the adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at $275m versus $312m in Q2 2022. Sonoco’s adjusted EBITDA margin was 16.1%.
Sonoco president and CEO Howard Coker said: “In the second quarter, volume softness beyond our expectations negatively impacted Consumer metal packaging and Industrials [business segments].
“In metal, accelerated inventory reduction programmes within our top food and aerosol customers resulted in lower than expected demand and negatively impacted operating leverage.
“In Industrials, volume for paper and converted products remained low across all geographies and end markets including paper, film, textile and appliances. Industrial customers cited lower-end market demand and customer destocking as factors for declines.”
The company’s net sales for the first half (H1) of this fiscal year was $3.43bn, as against $3.68bn in H1 last year.
The operating profit amounted to $417.5m in the first six months of 2023, while the same was $366.5m a year ago.
For the next quarter, Sonoco is expecting its adjusted earnings per share (EPS) to range between $1.25 and $1.35.
The full-year EPS is estimated to range from $5.10 to $5.40.
