Packaging giant Silgan Holdings Inc. got off to a hot start in 2020, posting record sales volumes in the first quarter of the year.
Stamford, Conn.-based Silgan also posted record adjusted net income of 57 cents per diluted share for the quarter. According to Plastics News' most recent rankings of North American plastics processors, Silgan is the region's eighth largest blow molder, 10th largest injection molder and 22nd largest thermoformer.
Sales volumes in Silgan's closures unit — including pumps and sprayers — was up 5 percent for the quarter, with plastic containers unit sales volumes up almost 6 percent. In a news release, officials said the plastic container volume increase was due primarily to higher demand for food and consumer health products starting in March as a result of a spike in consumer demand in response to COVID-19.
Closure sales roughly were flat at a little more than $357 million for the quarter, with plastic container unit sales also essentially flat at just under $165 million. Gains in sales volumes for plastic containers were offset by pass-through of lower raw material costs and a less favorable product mix, officials said.
Closures and plastic containers combined accounted for almost 51 percent of Silgan's sales for the quarter. The remainder of the firm's sales came from its metal containers unit.
"Let me start by saying how saddened we are by the global loss of lives and economic uncertainties resulting from the current [COVID-19] crisis and how inspired we are by the first responders and health care professionals on the front lines," CEO and Chairman Tony Allott said in the release.
"Our business has been declared essential under the guidance of the U.S. Department of Homeland Security and has received similar designations from [most] other governmental agencies in the geographies in which we operate, and we take that responsibility with pride and commitment," he added.
Allott also said that "given the critical nature of our products and due to the fortitude of our employees, we exceeded our expectations driven by record volumes in each of our businesses." Silgan also made one-time incentive payments to its plant employees during the COVID-19 crisis.
In spite of "unprecedented uncertainties," Allott said that Silgan expects to be able to keep its plants operational and has increased its earnings estimate and range. Officials said that the increased estimate is driven by anticipated continued higher demand for food and consumer health products used principally in the home, partly offset by declines in products used primarily in public venues.
Full first-quarter results for Silgan showed sales essentially flat at $1.03 billion and profit up 23 percent to $57.6 million.
Even before announcing first-quarter results, 2020 had been a big year for Silgan. The firm on Jan. 27 announced plans to buy the dispensing business of Paris-based Albéa Group for $900 million. That deal is expected to expand and broaden Silgan's rigid packaging business. The firm followed that deal in early February with a smaller deal to acquire injection molder Cobra Plastics Inc. of Macedonia, Ohio.
Silgan's per-share stock price has done well so far in 2020. The price began the year around $31 but was at $33.30 in late trading April 22 for an increase of more than 7 percent.