IRISH-OWNED manufacturing group Ardagh Glass gave its former chief executive Eddie Kilty an "ex gratia" payment of €1.6 million last year following his retirement from his post on March 31st, 2007.

In addition, a contribution of €118,000 was made to Mr Kilty's defined contribution pension scheme.

This has emerged in accounts just filed in the Companies Office here by Ardagh Glass Group plc, which is controlled by Irish financier Paul Coulson and has glassmaking operations in seven European countries.

Mr Kilty, who had held the post for many years and is still a director of the group, earned just over €1.9 million from Ardagh last year in remuneration. He was paid a salary of €334,000 and received fees of €5,000.

Mr Coulson was the next highest earner on the Ardagh board, receiving a salary of €408,000 last year, the same amount as in 2006.

In total, the Ardagh directors were paid €4.3 million in 2007, up from €2.4 million a year earlier.

Losses at the manufacturing group narrowed in 2007 to €14.6 million from €40.2 million in 2006.

This was due to a sharp rise in revenues, driven by Ardagh's acquisition in June 2007 of Rexam, a glassmaker with operations in five countries in northern Europe.

The accounts show that the group's turnover increased by 58 per cent last year to just over €1 billion. Ardagh, which employs almost 6,800 staff, made an operating profit of €55.5 million last year, up from just €1.6 million in 2006.

The company spent €87.2 million financing its €1 billion in borrowings.

This compared with €53.6 million a year earlier. No dividend was paid to shareholders.

The purchase of Rexam, for an "enterprise value" of €647 million less net debt - doubled the size of Ardagh's business.

The accounts state that, based on a full-year contribution from Rexam, Ardagh would have earned revenues of just more than €1.3 billion and its operating profit would have been €94.6 million.

The report from Ardagh's directors described 2007 as a "very successful year" for the company.

"The UK and Germany performed well in 2007 with improvements in sales and Ebitda [earnings before interest, tax, depreciation and amortisation] over the prior year as a result of improved trading conditions," the report stated.

"Trading conditions in Poland, Italy and in the engineering businesses remain at acceptable levels."

In January this year, Ardagh announced a three-year €450 million investment programme in its manufacturing facilities to "strengthen its competitive position within Europe".

The accounts state that this will generate annual cost savings of about €20 million in the short term and around €14 million in the medium term.

Ardagh is a successor to the former Irish Glass Bottle operation in Ringsend, which closed some years ago.