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The beverage can maker, which operates 55 can making plants in more than 20 countries, today (12Nov2015) announced its third quarter trading update. Trading had remain in line with prior management expectations. Overall global beverage can volumes were up 3% (1% excluding acquisitions) in the quarter. In February 2015, US company Ball and Rexam announced that they had reached agreement on the terms of a recommended offer for Rexam. The transaction is still expected to close in the first half of 2016. The share price was little changed in early morning UK stock market trading.
Chief Executive Comment:
"Rexam remains in good shape operationally with global beverage can volume growth of 3% in the third quarter. As expected, volume growth slowed down in Europe and softness continued in the Middle East. In North America, the carbonated soft drinks market remains challenging, but we had good growth in specialty volumes driven by beer and energy drinks. Volumes in South America returned to growth towards the end of the quarter, driven by strong growth in specialty cans. After taking into account the impact of foreign exchange, our expectations for the full year are unchanged."
Outlook:
Accompanying management comments noted that "Looking into 2016, the environment remains challenging but we continue to expect growth in global can volumes. Pricing reductions in Europe will be mostly offset by the benefit of the restructuring programme announced in February this year. We will incur ramp-up costs for our new plants in Widnau and India and the devaluation of the Brazilian Real against the US dollar, if maintained, will give rise to further foreign exchange losses. Finally, at current aluminium premium rates, we would expect a £30-35 million tailwind, although premium remains uncertain and a further update will be provided at our full year results."
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