Rexam trading in line with expectations with aluminium costs falling

Beverage can maker Rexam PLC on Tuesday said it is trading in line with expectations, with can volumes higher in the first quarter, boosted by a good performance in Europe but offset by softer conditions in the Middle East and North American markets and a slowdown in South America, though the group expects to benefit this year from falling aluminium premiums.

FTSE 250-listed Rexam, which is being acquired by US rival Ball Corp for GBP4.3 billion, said overall global beverage can volumes in the first quarter to the end of March rose 5%. Volumes in Europe were strong in the quarter, driven by energy drink can volumes, with growth also seen in Russia, the UK, Germany, Italy, India and Egypt.

But the group was hit by softer market conditions in the Middle East. Standard can volumes were pushed lower in the North America by a weaker market, while specialty volumes continued to grow, also on the back of energy drinks. South America volumes slowed towards the end of the quarter, as specialty can volumes were again offset by weaker standard volumes.

The group also said aluminium premiums have fallen sharply and, at current rates, will result in costs coming down GBP10 million to GBP15 million in the current financial year, compared to the GBP30 million hit the group had been anticipating.

"Overall performance so far this year has been in line with our plans. We continue to expect 2015 to present a tough trading environment, but, as ever, we will focus on tight cost management and the elements of our business that we know we can control," said Rexam Chief Executive Graham Chipchase.