Billionaire Graeme Hart’s US companies rake in $15b revenue

American earnings down but accounts still looking healthy

The challenging global economy pushed down revenue from two listed United States companies majority-owned by New Zealand’s richest man, Graeme Hart, but they still made a combined US$9.2 billion ($15b), new annual accounts showed.

Publicly listed packaging business Pactiv Evergreen Inc, listed on the Nasdaq in September 2020, made total net revenue of US$5.5b for the year to December 31, 2023, while Reynolds Consumer Products Inc, also Nasdaq-listed, made US$3.7b ($6b) in the same year.

Fonterra made $24.5b in its latest year. But earnings from Hart’s two American companies are down. Pactiv had previously reported net revenue of US$6.2b ($10.1b) in the year to December 31, 2022, its annual report showed. The 2022 net profit of US$318m became a US$223m net loss in 2023 partly due to lower revenue but also interest expenses rising from US$218m to US$245m.

Reynolds’ total net revenue also fell, from US$3.7b in 2022 to US$3.67b in the year ended December, 2023. Net income rose from US$258 million to US$298m partly because the cost of sales dropped, pushing up gross profit from US$776m to US$942m.

Reynolds makes aluminium foil, parchment paper, plastic wrap, oven bags, slow cooker liners, rubbish bags, slider bags, plates and cups with brands including Reynolds Wrap, Alcan and Diamond.

“The company continued to gain market share in 2023 as retail volume decreased 2 per cent compared to a weighted average category decline of 4 per cent for the year,” Reynolds said in a press release.

Lance Mitchell, Reynolds’ president and chief executive, said last month: “Reynolds Consumer Products is performing very well in a challenging economic environment and I am extremely proud of all that our team accomplished in 2023.

“We increased market share in our largest categories, restored operational stability in the Reynolds cooking and baking business, outperformed our earnings expectations and drove record cash flows, resulting in leverage of less than three times adjusted ebitda at year end.

“Our integrated brand and store brand model remains a competitive advantage and we will build upon these accomplishments to drive further earnings growth and financial flexibility in 2024.”

Reynolds is trading around US$29.12. Hart companies own 78 per cent of Pactiv Evergreen and 74 per cent of Reynolds.

In November, the Herald reported on Hart’s new 103m megayacht in Amsterdam where he was pictured with wife Robyn.

Their daughter Gretchen Hawkesby shared photos of the family on a trip for the boat launch. Boat International reported: “Formerly known only as Feadship 1011, the highly secretive 103m Feadship superyacht project has now been named Ulysses.”

Pactiv Evergreen says it is one of the top makers of packaging for fresh food and beverages in the US, employing 14,000 staff at 51 manufacturing sites and 41 distribution centres, producing 14,000 unique products.

“Whether you grabbed a cup of coffee on your way into the office or enjoyed a homecooked breakfast, the chances are that you’ve relied on packaging from Pactiv Evergreen today,” Pactiv says on its website.

“While Pactiv Evergreen is a relatively new publicly traded company, our history goes back to 1880 when John Cherry began the Evergreen Packaging business,” the business says.

It said it demonstrated resilience in the face of challenging market conditions by delivering full-year diluted earnings per share of US$1.77, net income from continuing operations of US$319m and adjusted ebitda from continuing operations of US$785m, exceeding full-year guidance.

Shares are trading around US$13. Food containers, plates and bowls, cups for hot and cold drinks, lids, wraps, cutlery, meat and poultry trays, egg cartons and reclosable beverage cartons made by the company are supplied to full and quickservice restaurants.

Pactiv also supplies food service distributors, supermarkets, shops, food and beverage producers, food packaging and processing businesses.

Last month, Pactiv Evergreen declared a quarterly dividend of US$0.10 cents per share, to be paid on March 29.

Latest quarterly results were down. Pactiv Evergreen made total net revenues of US$1.27b for the fourth quarter of 2023, down 14 per cent compared with US$1.47b in the fourth quarter of 2022 and down 8 per cent on US$1.37b in the third quarter of 2023.

Net income from continuing operations of US$22m for the fourth quarter of 2023 compared with US$27m in the fourth quarter of 2022 and US$28m in the third quarter of

2023.

In this country, Hart’s Rank Group owns one of our oldest and biggest timber building products businesses, Carter Holt Harvey, organised into four units:

• Carter Holt Harvey Building Products (CHH Timber);

• Carter Holt Harvey Plywood (CHH Plywood);

• Carter Holt Harvey LVL (Futurebuild);

• Carters Building Supplies, a 50-branch national retail chain.

Rank owns assets that deliver what we wrap stuff in, our need for food and shelter and where we store stuff. Although Hart lives in Auckland, most of his investments are overseas.

However, his focus has returned to New Zealand in recent years, with investment in property, including in South Auckland’s warehouse/logistics projects via Rank’s Fernbrook.

And last year, he and his wife Robyn showed their philanthropic side with a $6.5m donation to the Starship children’s hospital.