Crown Holdings reports drop in net sales due to COVID-19
Overall, Crown’s net sales in Q2 2020 were $2,689 million (€2.3 billion) compared to $3,035 million (€2.65 billion) in 2019, reflecting the impact of the COVID-19 pandemic on sales unit volumes, the pass-through of lower material costs and $73 million (€63.8 million) of “unfavourable” currency translation.
Income from operations was $275 million (€240 million) in Q2 compared to $383 million (€334 million) in the same period last year. Segment income was $322 million (€281 million) compared to $386 million (€337 million) in 2019, primarily due to lower sales unit volumes, “pandemic-related inefficiencies”, and $11 million (€9.6 million) of unfavourable currency translation.
The firm reported that although global beverage can shipments decreased by 5% during the quarter, North America was “propelled” by double-digit gains. Timothy J Donahue, president and CEO at Crown Holdings, said that disappointing results in the European beverage sector stemmed from soft volumes, particularly in southern Europe where a drop in tourism due to the pandemic “significantly curtailed on-premise consumption”.
“The company’s overall performance during the second quarter was solid in the face of the ongoing global coronavirus pandemic,” said Donahue, who went on to highlight the progress made at several beverage can production facilities.
“Early this year, we commenced production on the third production line at the Toronto, Ontario beverage can facility to meet the increasing requirements of customers,” he said. “During Q2, we completed the conversion of two lines in Seville, Spain (beverage plant) from steel to aluminium and in June we began commercial production on the third line at our Nichols, New York facility.
“Earlier this month, we commenced operations at a new one-line plant in Nong Khae, Thailand. We previously announced our intention to construct a greenfield facility in Bowling Green, Kentucky, an attractive location to effectively serve a number of diverse customers in the region. The plant is targeted to start up during Q2 2021.
“Subsequent to our previous announcement, due to rising demand expectations, the company announces that it will add a second line to that facility with a late Q3 2021 planned start-up.
“To meet the expanding requirements of speciality cans in the Pacific Northwest, we will construct a third line in our Olympia, Washington plant which is scheduled to begin production in Q3 2021.”
Donahue thanked the Crown Holdings team for its “considerable efforts” during the COVID-19 crisis, adding that