Greif, a global leader in industrial packaging products and services, is grappling with persistent soft demand, a trend that extended into its most recent fiscal quarter. Adding to these headwinds, the escalating conflict in the Middle East has introduced new complexities, prompting the company to revise its financial guidance.<\/strong><\/p>\n For Greif, the struggle with subdued demand has been a consistent theme, continuing through its fiscal second quarter, which concluded on March 31. CEO Ole Rosgaard conveyed a cautious outlook during a recent earnings call, stating, “We don\u2019t see an inflection point for the rest of the year.”<\/em> He emphasized the significant operational leverage and earnings growth Greif stands to unlock once a meaningful upturn in demand materializes.<\/p>\n The quarter also saw the emergence of fresh demand challenges directly linked to the conflict in the Middle East, specifically citing a “war with Iran” that commenced on February 28. Rosgaard acknowledged the “direct impacts to our business,” noting that while the total EBITDA loss in Q2 was less than $5 million, the potential for ongoing disruption has been factored into the company’s forward-looking guidance.<\/p>\n Greif maintains multiple facilities across the affected region, including key operations in Israel, Egypt, and Saudi Arabia<\/strong>. Executives are actively managing “intermittent periods of shutdowns in every one of our facilities in the region,” alongside navigating supply chain disruptions and escalating input costs. Despite these challenges, Rosgaard expressed confidence in Greif’s ability to navigate the situation, drawing on its nearly 150-year history of weathering numerous conflicts, including recent events in Venezuela and Ukraine. “When you operate almost 250 plants in over 40 countries and you have these occurrences, you just know what to do,”<\/em> he asserted.<\/p>\n In response to higher costs exacerbated by the conflict and broader inflationary pressures, Greif implemented a $60 to $70 per short ton price increase<\/strong> on uncoated recycled board (URB) in March. This move, mirroring actions by other leading URB producers, has already seen recognition from Fastmarkets RISI in April. CFO Larry Hilsheimer anticipates positive effects from this increase starting in July, projecting a full-year benefit of $9 million.<\/p>\n The company also made significant strides in its cost optimization plan, advancing it by $10 million<\/strong> last quarter. This brings total savings to $75 million, moving closer to its stated goal of $120 million by the end of fiscal year 2027, and keeping it on track for the 2026 target of $80 million to $90 million. Furthermore, Greif reported a robust improvement in free cash flow, up by $93 million<\/strong> year-over-year. Rosgaard highlighted these achievements as evidence of the company’s resilience: “Those results demonstrate our ability to drive returns through volatility and disruptive impacts to our business from the conflict in the Middle East.”<\/em><\/p>\n Due to the persistent uncertainty surrounding the Middle East conflict, Greif has prudently adjusted its full-year EBITDA guidance, lowering the floor from $630 million to $610 million<\/strong>. Hilsheimer clarified the rationale: “To be clear, if not for the already incurred and potential direct impacts of the conflict, we would not have changed our low-end guidance.”<\/em><\/p>\n The company has also recalibrated its expectations for 2026 volumes. It now projects volumes for metals, fiber, and closures to experience a mid-single-digit decline, while polymers are expected to remain flat. Despite these adjustments, Greif is maintaining its low-end free cash flow guidance of $315 million<\/strong>, underscoring its commitment to financial stability amidst a challenging global landscape.<\/p>\n #Greif #EarningsCall #MiddleEastConflict #SupplyChain #IndustrialPackaging #FinancialGuidance #EBITDA #CostOptimization #URB #Geopolitics<\/p>\n","protected":false},"excerpt":{"rendered":" Middle East Conflict Adds to Greif\u2019s Demand Challenges, Company Revises Outlook Greif, a global leader in industrial packaging products and services, is grappling with persistent soft demand, a trend that extended into its most recent fiscal quarter. Adding to these headwinds, the escalating conflict in the Middle East has introduced new complexities, prompting the company […]<\/p>\n","protected":false},"author":2,"featured_media":13072,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[],"class_list":["post-13071","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-middle-east-news"],"_links":{"self":[{"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/posts\/13071","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fajr.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13071"}],"version-history":[{"count":0,"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/posts\/13071\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fajr.news\/index.php?rest_route=\/wp\/v2\/media\/13072"}],"wp:attachment":[{"href":"https:\/\/fajr.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fajr.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fajr.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Demand Challenges Persist Amidst Geopolitical Tensions<\/span><\/h2>\n
Conflict’s Toll: Direct Impacts on Business Operations<\/span><\/h2>\n
Strategic Responses: Price Hikes and Cost Optimization<\/span><\/h2>\n
Revised Outlook Reflects Geopolitical Uncertainty<\/span><\/h2>\n