Greif Reports Third Quarter 2020 Results
"Financial results were weaker as expected, dragged down by soft industrial conditions around much of our global portfolio and by a significant price/cost squeeze in our paper business." – Pete Watson, President and CEO, Greif.
Aug. 26, 2020 - Greif, Inc. today announced third quarter 2020 results. The Company also reintroduced guidance for the fiscal year ending October 31, 2020.
The following are excerpts from Greif's third Quarter 2020 earnings report:
"Our global Greif team executed well during the fiscal third quarter in the face of a challenging operating environment," said Pete Watson, Greif's President and Chief Executive Officer. "Financial results were weaker as expected, dragged down by soft industrial conditions around much of our global portfolio and by a significant price/cost squeeze in our paper business. Despite these external challenges to profit, we generated free cash flow essentially flat to the prior year and paid down debt through stronger operating discipline and better working capital performance.
"Given our strong execution driving cost reduction and operating efficiencies, combined with increased near term visibility of the COVID-19 pandemic volume impacts to the remainder of the fiscal year, we are reintroducing financial guidance ranges."
Paper Packaging & Services
Net sales decreased by $70.7 million to $459.3 million primarily due to approximately $54.0 million of prior year net sales attributable to the divested Consumer Packaging Group business, lower published containerboard and boxboard prices, and lower volumes. During the quarter, the Company took approximately 10,000 tons of economic downtime across its containerboard operations, down 14,000 tons sequentially from the 24,000 tons taken in the second quarter 2020.
Gross profit decreased by $45.8 million to $88.9 million. The decrease in gross profit was primarily due to the same factors that impacted net sales, higher old corrugated container input costs, and product mix, partially offset by lower manufacturing costs.
Operating profit decreased by $49.8 million to $13.3 million. Adjusted EBITDA decreased by $39.0 million to $72.0 million primarily due to the same factors that impacted gross profit and the segment receiving a greater portion of allocated corporate costs, partially offset by a reduction in the segment's SG&A expense.
Greif's full third quarter 2020 report is available on the company's website: www.greif.com.
Greif is a global leader in industrial packaging products and services. The company produces steel, plastic and fibre drums, intermediate bulk containers, reconditioned containers, flexible products, containerboard, uncoated recycled paperboard, coated recycled paperboard, tubes and cores and a diverse mix of specialty products. To learn more, visit: www.greif.com.
SOURCE: Greif, Inc.