Ardagh blames pretax loss on energy costs

In a document circulated to bondholders, Ardagh Glass reported a pretax loss of EUR 1.5 million in the three months to the end of September 2006, compared to a profit of EUR 3.9 million in the same pe…

In a document circulated to bondholders, Ardagh Glass reported a pretax loss of EUR 1.5 million in the three months to the end of September 2006, compared to a profit of EUR 3.9 million in the same period 2005. Blame for the results was put on high energy costs. The group reported a pretax loss of EUR 22.1 million for the nine months to the same date, compared to a gain of EUR 42.3 million in the same period in 2005. Turnover for the glassmaker in the 3Q 2006 was EUR 168.7 million, up from EUR 155.7 million in 2005, an increase of 8.3%. Turnover for the first three quarters of 2006 was EUR 472.4 million, up from EUR 397.4 million the previous year. However, the figures for the cost of sales for the first three quarters of 2006 show they have grown to EUR 448.4 million from EUR 346.5 million in the year-ago period. “Escalating energy costs was the primary reason for the decline in gross margins across the group, with the UK being the worst affected”, Ardagh Glass Holdings said in the report. The British operation is the largest part of the group. Glass container turnover in Britain was broadly in line with the same period 2005, while turnover with Heye Glas and Abruzzo Vetro was slightly ahead due to higher volumes. In Britain, the group is in competition with the Sen Quinn glass operation. Ardagh no longer makes glass in Ireland. It owns Rockware Glass in Britain, Heye-Glas in Germany, Abruzzo Vetro in Italy, and Huta Szkla Ujscie in Poland. The site of Ardagh“s former glass operation in Ringsend, Dublin, is now to be developed by builder Bernard McNamara, financier Derek Quinlan and the Dublin Docklands Development Authority. South Wharf, the company that owns the site, separated from the old Ardagh Glass plc four years ago in a restructuring arranged by Paul Coulson, chairman and major shareholder in Ardagh. Ardagh shareholders had the option of taking up a stake in South Wharf. Its sole asset was the site of the former bottle plant iat Ringsend, Dublin. Earlier in December 2006, the shareholders voted to sell South Wharf to the developers for EUR 412 million. Mr Coulson“s company, Yeoman International Holdings SA, Luxembourg, owns 41.28% of Ardagh, which is incorporated in Jersey. The chief executive of Ardagh, Eddie Kilty, is due to step down in 2007 and is to be replaced by Niall Wall, who joined the Ardagh board in September 2006.