Good adherence pack sales and profits growth helped US packaging group MeadWestvaco to a positive set of Q2 financials, despite a 16 per cent drop in sales for the period.
MWV, which has struggled in the previous two quarters in the face of higher input costs and weakening demand, posted earnings of $125m (€89m), or 72 cents a share, up from the $56million, or 33 cents a share, it reported this time last year.
The major factor in the earnings hike was the $112m tax credit MWV gained through its use of alternative fuels, however, as Company spokesperson Alison von Puschendorf explained, gains made by it healthcare packaging also played their part.
She told in-PharmaTechnologist that: “healthcare had strong sales and profit growth in the quarter due to a rise in generic drugs, low-cost options and products that promote a patient’s adherence to medication.”
Von Puschndorf went on to say that the firm, whose shellpack blister technology is used by US retail giant Wallmart for its generic drugs, “believe that there is tremendous value in healthcare delivery solutions that promote adherence.”
She also revealed that European sales of MWV’s range of primary dispensers which, in the healthcare sector, includes the AccuPump and Sprayette IV product lines, have begun to stabilize.
Restructuring efforts continue
Even excluding the fuel tax credit earnings were 22 per share, well ahead of consensus estimates of a Reuters poll. The other key factors driving earnings were MWV’s cost reduction and restructuring programmes.
In January the firm announced plans to eliminate about 2,000 positions and close or restructure of 12 to 14 manufacturing facilities in a bid to save $125m by the end of the year.
However, at yesterday’s Q2 report, MWV revealed that its efforts have saved $46m over the year to date and claimed that it is on track to exceed its initial savings projection.