Ardagh Glass - comment

On the 24Q2 results call, management did not comment on the state of discussions around Ardagh Group's debt restructuring. However, the quarterly numbers and reduced FY guidance underline that the cap stack is unsustainable. The term loan Apollo is providing to AMPBEV will ensure the flow of dividends to ARGID continues (for now). We will update our model over the next few days.

Q2 revenue was below our estimates as lower costs were passed on to customers. EBITDA expectations have been reduced to $680m (from $750m - $780m), broadly in line with the $650m we have been forecasting). Volumes are not rebounding as expected and whilst margins are being boosted by price reductions (denominator effect), EBITDA is not recovering fast enough. EBITDA was in line as the previous under-absorption of costs was partially passed on to customers. Production was down 4% in Europe, 14% in Africa and 11% in North America. The reduction in production was exacerbated by a shift to metal cans on cost concerns.