AEP Industries has reported a Q2 net sales increase of almost US$50m (€40m) and a profit rise of $13.3m from the same period last year despite a “high degree of economic pessimism in our markets.”
The firm posted profits driven by an acquisition, higher sales and passing price increases onto customers after posting a net income loss for the three month period ending 30 April last year.
The plastic packaging film manufacturer saw net Q2 sales for the three months increase by $48.2m from $248.5m for Q2 of 2011 as a result of the acquisition of Webster Industries.
AEP acquired the manufacturer and distributor of retail and institutional private label food and trash bags, for $25.9m in October last year.
The firm added the increase was also due to an increase in average selling prices attributable to the pass-through of higher resin costs to customers combined with an increased sales volume.
“We are very pleased to deliver sales growth in our traditional businesses particularly with such a high degree of economic pessimism in our markets,” said Brendan Barba, chairman, president and chief executive officer of AEP Industries.
Gross profit for the three months to Q2 was $43.1m an increase of 44% compared to the same period last year because of contributions from Webster, increased sales volumes, material margins and plant utilization.
Net income for the three months was $4.8m, compared to a net loss of $0.7m, for the three months ended April 30, 2011.
Operating expenses stood at $30.4m, an increase of 19%, as Webster incurred $3.9m and the remaining amount was attributed to selling and delivery costs as a result of more volumes sold and increased fuel costs.
Adjusted EBITDA was $24.8m in the current quarter as compared to $19.9m for the three months ended April 30 last year.
Fluctuating resin costs
Barba added: “Despite fluctuating resin costs, we have improved margins through a combination of cost controls and increased volumes.
“We expect Webster‘s operating income will steadily increase as we continue to implement synergies and to improve efficiencies.”
AEP Industries manufactures, markets and distributes a range of polyethylene and polyvinyl chloride flexible packaging products used in the packaging, beverage and food industries throughout North America.