Greif Q4 profit plummets 73%

8 December 2011 (Last Updated December 8th, 2011 18:30)

Industrial packaging producer Greif has announced a 73% fall in its fourth-quarter earnings on weaker margin and restructuring charges, despite revenue growth.

Industrial packaging producer Greif has announced a 73% fall in its fourth-quarter earnings on weaker margin and restructuring charges, despite revenue growth.

David B. Fischer, Greif president and CEO, said the results included good net sales and operating profit before special items, as well as asset gains for the company.

"Our consolidated results were impacted by a decline in industrial packaging demand, particularly in Western Europe, and increased market pressure on both margins and volumes during the second half of the year," he said.

The Ohio-based firm reported net income of $20.8m, which has decreased from $76.6m in the corresponding period a year earlier.

Net sales during the quarter ending 31 October 2011 were $1.13bn, up 14% versus $993.9m during the corresponding time in 2010.

Adjusted net income, excluding items, decreased from $88.8m to $39m.

For the fiscal 2011, the company's net sales rose 23% to $4.24bn from $3.46bn in 2010. Gross profit also increased to $801.2m compared to $703.7m due to higher sales volumes.

The Rigid Industrial Packaging & Services segment reported a 17% rise in 2011 net sales to $3.01bn from $2.58bn for 2010, while net sales went up by 15% to $812.3m compared to $704.8m for the fourth quarter of 2010.

The company predicted that challenging market conditions would continue in the first half of the current fiscal year, with recovery during the second half.