O-I reported solid first quarter earnings – but warned of the financial impact of the Covid-19 pandemic for the rest of the year.

The world’s largest container glass manufacturer said it benefitted from a favourable price mix as well as good cost performance.

Shipment levels were 0.8% below prior year reflecting the initial impact of the Covid-19 pandemic.

First quarter net sales were $1.56 billion compared with $1.64 billion in the prior year. Higher selling prices increased revenue $19 million.

However, lower shipments negatively impacted sales by $20 million.

Sales volumes reflected the net effect of a 1.7% decline due to Covid-9, a 1.1% decline in organic sales volumes and a 2.0% benefit from its recently acquired Nueva Fanal facility in Mexico.

In its Q1 financial statement the group said: “Fortunately, the manufacture of glass containers has been largely viewed as essential to the important food and beverage value chain in the countries in which we operate.

“However, we are still impacted by the broader supply chain issues and in some cases certain end use categories that we serve are not deemed essential.

“Reflecting the challenges with the COVID-19 pandemic, O-I’s shipment in tons during the last two weeks of March were down 7% overall, with the most significant reductions in Latin America where government restrictions have been most stringent and Europe.”

It has temporarily curtailed some capacity and said shipments have been unfavourably impacted in April. Shipments should improve as markets reopen, it said.

The company has implemented a programme to reduce senior executives’ salaries by 25%, with repayment in January subject to achieving certain goals.

It has withdrawn its financial guidance for 2020.

“The company is actively monitoring the impact of the Covid-19 outbreak, which will negatively impact its business and results of operations for the second quarter of 2020 and likely beyond.”