Kiwi billionaire Graeme Hart's debt-laden US packaging giant, Reynolds Group, said lower product prices drove its earnings down in the third quarter to September 30.
In a filing to the US Securities and Exchange Commission, Reynolds Group said its net profit for the September quarter fell by 80 per cent to US$40 million ($62.5m), while revenue for the period fell by 5 per cent to US$2.4 billion.
The company said the revenue fall over the quarter was mostly due to lower sales volume, lower pricing, and the impact of the sale of some of its businesses.
For the nine months, the group's earnings fell by 20 per cent to US$185m, while revenue fell by 3 per cent to US$7.2b.
Reynolds is made up of four divisions, Reynolds Consumer Products, Pactiv Foodservice, Graham Packaging and Evergreen.
The company is looking at selling its Reynolds Consumer business through a possible initial public offering or through an outright sale, but it said no decision had been made.
Reynolds Consumer is a leading manufacturer of branded and store branded consumer products such as aluminium, oil, wraps, rubbish bags, food storage bags and disposable tableware and cookware.
The division has a large customer base and operates mostly in North America. Most of Reynolds Consumer's revenue comes from the US and Canada.
In its filing, the company said Reynolds Consumer's earnings before interest, tax, depreciation and amortisation came to US$164m in the September quarter, up one per cent on the same quarter last year, and was responsible for 22 per cent of the group's revenue over that quarter.
Reynolds Group's four segments are the result of a series of debt-funded transactions. As at September, 30, the group's total indebtedness stood at US$11.03b.
"Our results of operations, financial position and cash flows are significantly impacted by the effects of these acquisitions, which were financed primarily through borrowings, including recurring interest costs and transaction-related debt commitment fees," the company said.
"Our future results of operations, including our net financial expenses, will be significantly affected by our substantial indebtedness," it said.
"The servicing of this indebtedness has had and will continue to have an impact on our cash flows and cash balance," it said.
The company said it results and margins were also impacted by changes in the costs of its raw materials and energy prices.
Earlier this year, Reynolds Group sold some of its North American, Costa Rican and Japanese units to investment manager Cerberus Capital Management for US$615m.
Hart began his packaging empire in 2006 with a protracted takeover of Carter Holt Harvey.
He went on to buy International Paper's beverage packing unit for US$500m and Swiss company SIG for €1.69b the following year.
Alcoa's packaging business was added in 2008 for US$2.7b.
Hart then ramped up the expansion in 2010, spending US$6.5b on the leveraged buyout of Pactiv and then US$4.5b buying Graham Packaging and US$395m on Canada's Dopaco in 2011.