Subsidiary of U.K.-based scrap firm dismantles tanker vessel in Texas.
International Shipbreaking Ltd. (ISL), a subsidiary of United Kingdom-based EMR Ltd., has dismantled and sold to melt shops what it calls the “the first EU ship to be recycled in the United States.”
The project follows what EMR calls a $30 million investment in new equipment and processes at ISL’s site in Brownsville, Texas, designed to meet the requirements of the EU Ship Recycling Regulation.
The vessel, MT Wolverine was a nearly 520-foot-long chemical tanker with a carrying capacity of 16,000 metric tons. Prior to being decommissioned, it was sailing under the flag of Norway, says EMR.
ISL says it was able to recycle 97 percent of the materials removed from former tanker. “The arrival of MT Wolverine at our Brownville site was a proud day for everyone at International Shipbuilding Ltd.,” says ISL senior manager Chris Green.
“By investing $30 million in the latest technology, equipment and infrastructure, our business has become the first in the U.S. to be able to recycle ships to a level compliant with the EU Ship Recycling Regulation,” adds Green. “MT Wolverine shows that this effort and commitment is paying off.”
Green continues, “Around the world there are still too many ships that end their days being recycled in dangerous and environmentally-harmful yards on the other side of the world. By continuing to raise our standards, ISL is showing responsible ship owners there is better way to do business. ISL has the capacity to safely moor and recycle ships over 1,200 feet in length and 158 feet wide.”
Adds Green, “ISL completed the MT Wolverine ship recycling project without any recordable injuries to our employees, hazardous or regulated material spills, or regulatory violations of any kind.”
MT Wolverine was accepted for recycling this Jan. 31, 2022 and is one of 28 projects undertaken by ISL during the past 12 months, according to EMR.
The company's CEO says he expects the strong performance to continue in 2022.
Sonoco, a global packaging company headquartered in Hartsville, South Carolina, has reported financial results for its first quarter of 2022 ended April 3.
The company’s net sales were a record $1.77 billion compared with $1.35 billion in the Q1 2021, while its earnings per diluted share were $1.17, an increase from 71 cents in Q1 2021. Its base net income was a record $1.85 per diluted share compared with $1 per diluted share in the same period of 2021.
Sonoco says it expects second-quarter base earnings to range from $1.20 to $1.30 per diluted share, an increase from 93 cents per diluted share in the comparable quarter of 2021. It also has updated its outlook for full-year base earnings to a range of $5.25 to $5.45 per diluted share, up from $3.93 last year.
"Our Sonoco team delivered exceptional top-line and bottom-line results during the first quarter, which exceeded the high end of our recently increased guidance and were driven by record performances in our Consumer Packaging and Industrial Paper Packaging segments,” Sonoco President and CEO Howard Coker says.
Sonoco acquired Ball Metalpack Jan. 26, and Coker says the company is “very pleased with their better-than-expected first-quarter results.”
“Overall, the company's first-quarter earnings benefited from strong price/cost recovery across most of our businesses, the addition of Metal Packaging and solid customer demand in our Consumer and All Other businesses,” he continues. “These positive factors were only partially offset by last year's divestiture of the U.S. display and packaging business and the impact of foreign currency translation.
"Our Consumer Packaging segment achieved record sales, and operating profit grew over 113 percent versus the prior-year period due primarily to the earnings added by Metal Packaging, a positive price/cost relationship, productivity improvements and solid gains in volume/mix. Our Industrial Paper Packaging segment also produced record sales and operating profit, which improved almost 39 percent over the prior-year period due primarily to positive price/cost recovery. Finally, despite strong volumes and solid price/cost results, the All Other group of businesses experienced a 23 percent decline in operating profit due mostly to the 2021 divestiture of the U.S. display and packaging business," Coker concludes.
Sonoco reports record net sales of $1.77 billion for the first quarter, up 30.9 percent from last year's first-quarter sales of $1.35 billion. The company attributes the growth to higher selling prices, mostly implemented to offset inflation, sales added from the Metal Packaging acquisition and 2 percent growth in volume/mix.
Net income attributable to Sonoco for the quarter was $115.3 million, or $1.17 per diluted share, an increase of $43 million, compared with $72.3 million, or 71 cents per diluted share, in the first quarter of 2021. First-quarter 2022 net income included net after-tax, nonbase charges totaling $67.4 million, or 68 cents per diluted share, the largest component of which was $36.6 million, or 37 cents per diluted share, in net acquisition-related costs related to the Metal Packaging acquisition, including $18.7 million, or 19 cents per diluted share, of charges related to purchase accounting inventory "step-up" on the acquired inventory and $17.9 million, or 18 cents per diluted share, of net expenses mostly related to professional fees, according to the company.
Among the other nonbase charges Sonoco incurred was $10.6 million, or 11 cents per diluted share, of impairment and restructuring-related charges, including a $5.7 million after-tax impairment charge related to Sonoco’s decision to exit its operations in Russia given the ongoing Russia-Ukraine conflict.
Adjusted to exclude the above and other items, Sonoco says its base earnings in the first quarter of 2022 were a record $182.7 million, or $1.85 per diluted share, compared with $101.3 million, or $1 per diluted share, in the same period of 2021, an increase of $81.4 million.
The company’s gross profit for the quarter totaled $371.6 million compared with $277.9 million in the same period last year.
Sonoco reports its financial results in two segments: Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other.
Consumer Packaging. Sonoco’s Consumer Packaging segment primarily serves prepared and fresh food markets along with other packaging for direct-to-consumer products and includes round and shaped rigid paper containers; two- and three-piece steel tinplate cans and aerosol containers; metal and peelable membrane ends and closures; thermoformed plastic trays and containers; printed flexible packaging; and global brand artwork management.
Sonoco says its first-quarter 2022 sales for the segment were a record $868.1 million compared with $582.8 million in the first quarter of 2021. Segment operating profit was a record $173.6 million in the first quarter compared with $81.4 million in the same quarter of 2021.
Segment sales increased 49 percent year over year largely because of the Metal Packaging acquisition and higher selling prices. Sonoco says the segment volume/mix improved approximately 4 percent on solid gains in flexible packaging and plastic food packaging.
The company reports that segment operating profit increased 113.4 percent year over year also because of the Metal Packaging acquisition, favorable price/cost recovery, strong volume/mix and favorable productivity. As a result, segment operating margin improved to 20 percent in the first quarter of 2022 from 14 percent in the same 2021 period.
Industrial Paper Packaging. The Industrial Paper Packaging segment includes fiber-based tubes, cones, and cores; fiber-based construction tubes; fiber-based protective packaging and components; wooden, metal and composite wire and cable reels and spools; and recycled paperboard, corrugating medium, recovered paper and material recycling services.
First-quarter 2022 sales for the segment increased for the seventh consecutive quarter to a record $699.1 million, Sonoco says, up from $565.4 million in the first quarter of 2021. Segment operating profit was a record $72.7 million in the first quarter of 2022, compared with $52.3 million in the same quarter last year.
Segment sales increased 23.7 percent from the prior year's quarter largely because of higher selling prices implemented to offset raw material and non-material inflation, while volume/mix declined approximately 2 percent reflecting, among other things, severe winter weather, supply chain disruptions and operational closures in China stemming from COVID-19 restrictions, Sonoco says. Volume declines were concentrated in Asia and Europe tube and core operations, North America recycling and fiber protective packaging.
Segment operating profit improved 38.9 percent from the prior year's quarter, primarily driven by a positive price/cost relationship partially offset by lower volume/mix and productivity, Sonoco says. Segment operating margin grew approximately 120 basis points to 10.4 percent.
All Other. Businesses grouped as All Other include health care packaging, protective and retail security packaging and industrial plastic products.
First-quarter 2022 sales were $203.8 million compared with $205.2 million in the first quarter of 2021, Sonoco reports. The combined businesses reported an operating profit of $14.5 million in the current quarter compared to $18.8 million in the same quarter of last year.
Sales declined 0.7 percent from the prior-year quarter largely because of the divestiture of the U.S. display and packaging business, Sonoco says. The divestiture also caused operating profit to decline by 22.6 percent year over year. Operating margin declined to 7.1 percent in the quarter from 9.1 percent in the first quarter of 2021.
Coker says supply chain issues have led Sonoco to delay the conversion of its Hartsville paper machine from corrugated medium to uncoated recycled paperboard to the third quarter. “This delay is expected to result in less downtime and should provide more favorable results in our Industrial Paper Packaging segment in the second quarter.”
He adds, "To meet our long-term goals, we are continuing to invest in the long-term potential of our core Consumer and Industrial businesses to drive even further growth and productivity. In addition, we are pursuing a series of self-help actions over the next few years to simplify our structure to create a more effective and efficient organization and managing our portfolio for fewer, but larger businesses.”
The company cites strong operational performance for its success in the first quarter of 2022.
WM, Houston, has released financial results for the quarter ended March 31, saying it has delivered exceptional core price and yield results and grew profitable volumes.
“The first quarter of every year sets the tone for the rest of the year and our strong first-quarter results really set us up for success in 2022,” says Jim Fish, president and CEO of WM. “The result was double-digit growth in revenue, operating EBITDA (earnings before interest, taxes, depreciation and amortization) and cash from operations.”
According to WM, the core price for Q1 2022 was 7.3 percent compared with 3.4 percent in Q1 2021. Collection and disposal yield was 5.5 percent in the first quarter of 2022 compared with 2.8 percent in Q1 2021. Total volumes increased 3.6 percent in the first quarter of 2022, or 3.2 percent on a workday adjusted basis, compared with a decline of 3.3 percent in the first quarter of 2021, or a decline of 2.7 on a workday adjusted basis.
The company reported that its EBITDA in the collection and disposal business, adjusted on the same basis as a total company operating EBITDA, of $1.4 billion, or 31.2 percent of revenue, for the first quarter of 2022 compared with $1.3 billion, or 31.8 percent of revenue, for the first quarter of 2021.
“Our operating EBITDA margin of 27.6 percent was ahead of our plan [for the year], even in the face of record inflation and the delayed approval of the alternative fuel tax credits,” Fish says. “So, we executed extremely well in the first quarter and achieved better results than we anticipated.”
Operating EBITDA in the company’s recycling line of business, adjusted on the same basis as total company operating EBITDA, improved by $23 million compared with the first quarter of 2021. WM says the improvement primarily was driven by increases in market prices for recycled commodities.
Operating EBITDA in WM's renewable energy business, adjusted on the same basis as total company operating EBITDA, improved by $13 million compared with the first quarter of 2021. WM says this growth is primarily driven by increases in the value of renewable fuel standard credits, or RINs.
In Q1 2022, net cash provided by operating activities was $1.26 billion compared with $1.12 billion in the first quarter of 2021. The improvement in net cash provided by operating activities primarily was driven by the increase in operating EBITDA, according to WM.
Capital expenditures to support the business were $371 million compared with $259 million in the first quarter of 2021. In addition, in the first quarter of 2022, capital expenditures for sustainability growth investments totaled $47 million compared with $11 million in the first quarter of 2021. Free cash flow was $845 million compared with $865 million in the first quarter of 2021. In the first quarter of 2022, free cash flow without sustainability growth investments was $892 million compared to $876 million in the first quarter of 2021.
“The positive economic activity, combined with WM's diverse customer base, the recession-resilient nature of our business and nearly 75 percent of our revenue that is annuity-like, gives us the confidence to reaffirm the full-year outlook we provided in February,” Fish says.
Operating expenses as a percentage of revenue increased 120 basis points to 62.3 percent compared with the first quarter of 2021 but improved 70 basis points when compared with the fourth quarter of 2021. The increase in operating expense margin in the first quarter, when compared with the prior year, was primarily due to the impacts of increased wages for front-line employees, higher commodity prices for recyclables and alternative fuel tax credits received in 2021 that have not yet been renewed for 2022.
The company adds that it plans to further invest in technology as a solution to the ongoing labor crisis. Fish says the company anticipates reducing 5,000 to 7,000 positions over the next four years. WM says in this tight and expensive job market, it makes sense to use technology to reduce dependency on certain high-turnover jobs.
Finally, while WM says it will use automation and data to its advantage, it plans to invest in training and upskilling of existing employees to prepare them for higher-skilled future roles. Fish adds that WM has successfully decreased its turnover rate since last year.
“We've set the bar high in our first quarter with our results, and we're confident in our ability to deliver strong performance throughout the remainder of 2022,” he says.
The packaging producer credits sales growth to its business expansion, including its new K2 CRB machine in Kalamazoo, Michigan.
Graphic Packaging Holding Co., an Atlanta-based packaging producer, has reported it is on track to accomplish its long-term growth and profitability goals based on the results of its quarterly earnings report released April 26.
Net income for the first quarter of 2022 was $107 million, or 35 cents per share, based on 309.7 million weighted average diluted shares compared with its Q1 2021 net income of $54 million, or 19 cents per share, based on 277.2 million weighted average diluted shares.
“During the first quarter we achieved important milestones on the journey to realize our enhanced Vision 2025 goals,” President and CEO Michael Doss said during an earnings call. “While executing another solid quarter with 3 percent net organic sales growth, we continued to integrate our recently expanded European platform and began operating the new K2 CRB machine in Kalamazoo, Michigan.
“In addition, we successfully implemented pricing actions to offset an unprecedented inflationary environment. Importantly, the successful execution of our transformational CRB optimization project will drive benefits for the company, our employees and our customers for decades to comes as we produce the highest quality, lowest cost CRB in North America. Our business is expanding into new market segments and geographies and we are executing at a high level as a global team.”
Net sales. Graphic Packaging’s net sales increased 36 percent to $2,245 million in Q1 2022 compared with $1,649 million in Q1 2021. The company says the $596 million increase was driven by $222 million of positive price and $385 million of improved volume/mix related to organic growth from conversions to fiber-based packaging solutions and acquisitions, partially offset by $11 million of unfavorable foreign exchange.
EBITDA. For the first quarter of 2022, Graphic Packaging’s earnings before interest, taxes and amortization (EBITDA) was $335 million—a $107 million increase from Q1 2021. The adjusted EBITDA was $350 million in Q1 2022 compared with $240 million in Q1 2021 after adjusting both periods for business combinations and other special charges. Adjusted EBITDA in Q1 2022 was positively impacted by $222 million in pricing, $68 million in volume/mix, $14 million in net productivity and $1 million of favorable foreign exchange when compared with Q1 2021. This was partially offset by $176 million of commodity input cost inflation and $19 million of other inflation.
Graphic Packaging’s total debt, including long-term, short-term and current portion, was $5,967 million compared with Q1 2021—a $136 million increase. Total net debt also increased by $197 million in Q1 2022 for a total of $5,856 million compared with 2021. The company returned $23 million in capital to stockholders in Q1 2022 in dividends.
The company says capital expenditures for the first quarter of 2022 were up to $223 million compared with $146 million in 2021 primarily due to the project-completion expenses with the K2 machine and CRB platform investment in Kalamazoo.
Doss said, “While we continue to strengthen our capabilities and expand innovative offerings for customers, we are also optimizing our global production network, driving efficiencies and best-in-class customer service. Progress toward our Vision 2025 will be on full display this year as many of the critical initiatives we have put in motion over the last three years positively impact our financial results.
He added, “We remain fully committed to achieving strong growth and profitability as reflected in our financial guidance for 2022, and are on track to accomplish the long-term goals established with our enhanced Vision 2025.”
Graphic Packaging’s “Vision 2025” sustainability goals aimed for 2025 include: Reduce greenhouse gas emissions by 15 percent, reduce water usage by 15 percent, reduce energy consumption by 15 percent, make its products 100 percent recyclable and reduce LDPE usage by 40 percent.
CMC says the acquisition expands the scope of products it will offer its customers.
Commercial Metals Co. (CMC), Irving, Texas, has announced it has completed the acquisition of Tensar Corp., a provider of specialty geosynthetic solutions and engineering services based in Alpharetta, Georgia. The company purchased it from Castle Harlan, a New York-based private equity firm, made for a cash purchase price of $550 million, subject to customary purchase price adjustments.
CMC says Tensar is a global provider of ground stabilization and soil reinforcement solutions. It sells to more than 80 national markets through its two major product lines: Tensar geogrids and Geopier foundation systems.
Geogrids are polymer-based products used for ground stabilization, soil reinforcement and asphalt optimization in construction applications, including roadways, public infrastructure and industrial facilities. Geopier systems are ground improvement solutions that increase the load-bearing characteristics of ground structures and working surfaces and can be applied in soil types and construction situations in which traditional support methods are impractical or would make a project infeasible.
"I am thrilled to welcome Tensar's 650 worldwide employees to Commercial Metals," says Barbara Smith, chairperson of the board, president and CEO. "This acquisition marks another important milestone in CMC's growth strategy, expanding the scope of products and services we can provide to our customers."
Rockefeller Financial LLC served as the exclusive financial adviser and Kirkland & Ellis LLP served as legal counsel to CMC for this transaction.