Graham Packaging (York, Pennsylvania / USA; www.grahampackaging.com) has reported improved profits for the fourth quarter of 2010, with adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) of USD 125m (EUR 91m), up from USD 99.9m in the same period in 2009. Excluding the USD 16.8m of adjusted EBITDA from Liquid Container, which was acquired on 23 September 2010 (see Plasteurope.com of 11.08.2010), adjusted EBITDA for the quarter was USD 106m, a year-on-year increase of 6.4%.

Sales in the fourth quarter rose to USD 644m. Without the USD 93.8m contribution from Liquid Container, sales were USD 550m, a year-on-year increase of 2.9%, due to increases in resin costs being passed through to customers. Graham Packaging CEO Mark Burgess said fourth quarter profitability had exceeded the company’s expectations: “Our legacy business delivered a 6.4% improvement in adjusted EBITDA over the prior year as a result of operational improvements and our focus on productivity. This improvement occurred despite slightly lower volumes in our legacy business, a volume decline which was anticipated due to challenging market conditions and inventory destocking. Additionally, we are very pleased with the great progress we have made integrating Liquid Container and expect to maximise our cost synergies.”

Full year 2010 adjusted EBITDA was USD 504m. Excluding the contribution of Liquid Container, this fell to USD 484m, a 4.6% increase on the same period in 2009. Sales in the year were USD 2.51 bn, up from USD 2.27 bn in 2009. The acquisition of Liquid Container contributed USD 101m to the increase, with the remainder being driven by higher volumes and increases in resin costs that were passed on to customers. Burgess said improved volumes and productivity initiatives had helped provide growth of 4.6% in the legacy business over the full year. “We generated strong free cash flow and strengthened our capital structure with the retirement of USD 222m in debt. We continue to see good momentum on the technology and conversion fronts that can help us provide value-added packaging solutions for our customers. While our progress to date has been gratifying, we are excited about what we can deliver in 2011.”

The company expects adjusted EBITDA to be USD 583m in 2011, including USD 12m of synergies associated with the acquisition of Liquid Container, which it now expects to rise to USD 25m annually.