News

MWV, formerly known as MeadWestvaco, reported strong growth in many of its global packaging markets in the first three months of the year, but sharp increases in raw material and energy costs dented its profits.

The Richmond, Virginia-based packaging and paper firm narrowed a first-quarter loss from $23m (£11.5m) a year ago to an $8m loss this quarter. Sales rose by 6% to $1.52bn, while energy, freight and raw materials costs rose by $39m.

MWV chief executive John Luke said input cost inflation continued to "negatively impact" the results, demonstrated by a 25% fall in profit to $32m in the packaging resources business.

"Higher-value" packaging grades in the beverage, liquid packaging and commercial print markets led the sales increase in the division, while inflation and planned mill shutdowns were blamed for the fall in profit.

A similar picture emerged in the consumer solutions division, where profits fell by 55% to $9m as sales improved by 7% to $606m.

Sales in the US were unchanged, as improvements in the home and garden market and "solid performance" in the beverage market were offset by lower volumes in media and an "unfavourable" mix in the personal care business.

Sales outside the US grew by 13%, led by the beverage, personal care, tobacco, and home and garden packaging businesses.

"Our leadership in growing global packaging markets and our diversified mix of businesses position us to profitably grow our company in the face of challenging economic conditions," said Luke.

The firm said it was "prudently adopting a conservative outlook focused on maximising cashflow", which would be achieved by increasing prices to offset high input costs, driving sales outside the US, particularly in China, India and Brazil, and developing more innovative products.