O-I reported that volumes were down 1% on a global basis year-over-year largely as a result of lower beer shipments in Brazil.
In is Q2 2015 financial report it said that profits were impacted by a sharper than expected contraction in Brazilian beer sales.
Chairman and CEO Al Stroucken said: “Our performance in the second quarter was in line with expectations, as favourable results from non-operational items offset incremental weakness in Brazil.”
Its North America and Asia Pacific regions delivered solid results in the quarter. In Europe furnace rebuilds, coupled with ongoing competitive pressure and its asset optimisation programme, resulted in lower profits. In South America, it offset energy and soda ash inflation with price increases.
Net sales in the second quarter of 2015 were $1.5 billion, down $254 million from the prior year second quarter. Adverse currency translation caused by the strength of the US dollar accounted for approximately $240 million of the decline in net sales.
On a constant currency basis, the decline in net sales was approximately 1%. Price was essentially flat on a global basis, with lower prices in Europe and North America largely offset by higher prices in South America.
Global sales volume declined by 1% year-over-year. Volume in North America increased nearly 2%, where a modest decline in beer shipments was offset by higher shipments in all other categories. Volume in Asia Pacific contracted 3% due to the waning impact of plant shutdowns in China in 2014.
Sales volume in South America contracted 10%. The decline was most pronounced in Brazil, albeit from record sales in the comparable 2014 period.
As expected, Europe reported more production downtime than in the prior year due to planned furnace rebuilds and engineering activities associated with the asset optimisation programme.
Mr Stroucken said: “We have begun to see the stabilisation of market and demand trends. North American manufacturing operations are expected to continue to improve and Asia Pacific volumes will benefit from a major new beer contract in Australia.
"Lower volumes in South America, especially Brazil, are likely to continue weighing on the region’s profitability. European results in the quarter will be dampened by the carryover of production downtime from engineering projects and lower prices.”
