Pregis hit by escalating input costs

The Illinois-based company reported operating income of $7.27bn (£3.88bn) for the three months to 30 June; a 48.7% drop compared with 2007.

Net sales, however, rose by 13.9% to $275.2bn in the same period, boosted by favourable exchange rates and two acquisitions. Net sales from continuing operations rose by 1.6%.

Mike McDonnell, Pregis president and chief executive, said: “Our results continue to be negatively impacted by economic weakness in North America and Europe as well as by escalating raw materials and fuel costs. We continue to aggressively raise selling prices to offset the increased costs.”

Pregis announced last month that it would increase selling prices in Europe by more than 10% in the third quarter of 2008; North American prices are set to rise by more than 20%.

McDonnell said the firm had “had some success in achieving price increases” and was “striving to realise the full amount of the increases with minimal lag in order to restore margins”.

Sales in flexible packaging rose by 15.8%, while protective packaging recorded 15.4% growth, the firm said.

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