Graphic Packaging earnings slightly slimmer in Q2 2020

Atlanta-based Graphic Packaging Holding Co. has reported net income of $52.1 million, or 19 cents per share, for the second quarter of 2020. The figure represents an 18.3 percent decline in net income compared with second-quarter 2019 net income of $63.8 million, or 22 cents per share.

The company says its overall sales in the quarter increased by 4 percent to more than $1.6 billion compared with a figure of about $1.55 billion in 2019’s second quarter. “The $58.2 million increase was driven by $5.4 million of positive price and $65.9 million of volume/mix” factors, says Graphic Packaging. “These benefits were partially offset by $13.1 million of unfavorable foreign exchange,” adds the firm.

The increase in sales took place despite Graphic Packaging having closed the 70,000-tons-per-year White Pigeon, Michigan, coated recycled board (CRB) mill and having shut down a 120,000-tons-per-year containerboard production line in West Monroe, Louisiana.

“We delivered excellent performance in the second quarter as the company adapted to changing demand patterns resulting from the global COVID-19 pandemic,” says Graphic Packaging President and CEO Michael Doss. “Sales improved 4 percent year over year driven by acquisitions and net organic sales growth of 1.5 percent, which was partially offset by a decline in open market paperboard sales.”

Adds Doss, “The recession-resistant nature of our business was quite apparent during the quarter, and I am proud of the work our employees accomplished in successfully serving customers and ensuring continuity of supply globally.”

Graphic Packaging refers to itself as “one of the largest producers of folding cartons and paper-based food service products in the United States, [holding] leading market positions in solid bleached sulfate paperboard, coated unbleached kraft paperboard and coated-recycled paperboard.”

In 2019, Graphic Packaging announced its intention to invest $600 million in a recycled-content paperboard machine in Kalamazoo, Michigan. “Not only will the new machine reduce raw material consumption and address increased consumer demand for product with 100-percent-recycled fiber, it will also deliver environmental benefits,” the company’s Mike Farrell, executive vice president of its Mills Division, says in a corporate newsletter interview.