Rising raw material prices hit profits at plastic container maker IPL in the three months ended September 30th, figures just released show.
Irish-headquartered, Canada-listed IPL Plastics said on Friday that revenues grew 7.4 per cent to $169.2 million US dollars (€149.3 million) in the third quarter of the year from $157.5 million during the same period in 2018.
Net income fell by about a third to $4.8 million from $7.5 million. IPL blamed the rising cost of resin, a key raw material used in its products, and labour, for the slide.
Net income in the first nine months of the year fell by 80 per cent to $3.6 million from $17.1 million during the same period in 2018.
The company said it increased its own charges to combat the rising raw material costs, but further hikes in resin prices eroded this.
Chief executive Alan Walsh said IPL was working on a plan to boost margins and profitability.
“Our margin-enhancement programme will be conducted with an eye to improving the long-term competitiveness and sustainability of our business,” he added.
Mr Walsh stressed that the plan to increase profits would not rule IPL out of the hunt for acquisitions that are likely to grow its business.
Plastics manufacturers face growing pressure from consumers and governments who fear the material’s impact on the environment. IPL recently published a sustainability report committing itself to continue using recycled materials in production and cutting greenhouse gas emissions.
