Q2 profits put Graham back in the black

Favourable exchange rates helped push sales up by 15.9% in Europe and 20% in South America, although the firm said North American sales "lagged behind" the second quarter of 2006, except for household products.

Operating income increased by 24% to £23m for the six months to 30 June on sales that fell by 2% to £624m.

Graham Packaging chief executive Warren Knowlton said the firm had improved the "quality and quantity" of its earnings through a number of "cost and margin initiatives" that were all bearing fruit.

Nevertheless, he said continued increases in energy and other costs would lead to "pricing surcharges and increases" in the second half of the year.

Graham Packaging is owned by the Blackstone Group and produces around 20 billion container units each year at 85 plants across North America, Europe and South America.

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