Ball posts a 60% plunge in Q1 2023 net earnings; Russian beverage packaging business sell is held accountable

Ball Corporation announced its first quarter 2023 results on a US GAAP basis, revealing sales of $3.49 billion compared to $3.72 billion during the same period last year. That reflected a year-on-year drop of 6.18 per cent owing to lower demand and shipments. As a result, the company's net earnings declined significantly by 60.31 per cent from $446 million in 1QCY2022 to $177 million in 1QCY2023.

Ball Corporation also reported that its comparable net earnings were $217 million or 69 cents per diluted share in 1QCY2023 compared to $252 million or 77 cents per diluted share in 1QCY2022. The year-on-year downfall in Ball’s financial results could be partly attributed to its Russian beverage packing business sell to Arnest Group.

However, from the beverage packaging unit in North and Central America, Ball Corporation yielded $183 million of comparable operating earnings on $1.5 billion of sales for the first quarter of 2023 versus $174 billion on sales of $1.6 billion during the corresponding period of the last year. That showed the company generated more earnings this year on fewer sales caused by lower shipments but offset by incremental inflation recovery.

"We delivered strong first quarter results amid tough year-over-year comparisons driven largely by 2022 business divestments. Notable inflationary cost recovery, benefits of cost-out actions as well as improved operational efficiencies and aerospace program execution will significantly improve full-year results and more than offset higher interest expense and tepid first-half volume trends driven by varying global macroeconomic conditions impacting consumer demand," said Daniel W. Fisher, chairman and chief executive officer.

From the Middle East, Europe, and Africa, Ball Corporation's comparable operating earnings from the beverage packaging segment were $73 million on sales of $834 million in Q1 2023 versus $100 million of earnings on $942 million sales a year ago.

The recently constructed Kettering, U.K., and Pilsen, Czech Republic, facilities began initial line start-up activities late in the first quarter. These projects are expected to enhance Ball's activities for sustainable aluminium packaging across the regions.

From South America, Ball generated segment comparable operating earnings of $50 million in Q1 2023 on sales of $450 million compared to $78 million on sales of $494 million in Q1 2022, attributed to crippled demand across the South American operations.

Ball Corporation also posted operating earnings of $60 million on sales of $508 million under the aerospace segment in 1QCY2023. On a year-on-year calculation, both sales and earnings under aerospace grew by 0.79 per cent from $504 million and by 39.53 per cent from $43 million, respectively.

Following our typical seasonal working capital build, we ended the first quarter with cash and available liquidity in excess of $1.5 billion. Leveraging our second half 2022 cost-out actions, contractual inflationary cost recovery and reduced capital expenditures, we remain well-positioned in 2023 to deliver our long-term diluted earnings per share goal and free cash flow in the range of $750 million in addition to returning value to shareholders," said Scott C. Morrison, executive vice president and chief financial officer.