Global packaging giant Amcor (ASX: AMC) has reported a decline in net sales across its flexibles and rigid packaging segments in its half yearly results ending 31 December 2019.
Amcor attributed the 1.4 per cent slide in flexibles net sales to lower volumes in Europe and in particular in Eastern Europe where there was an increase in illicit trade and customer destocking. Rigid packaging net sales dipped 1.6 per cent compared to the same period last year.
Despite these decreases in net sales, the company delivered an overall GAPP net income of $252 million and an adjusted earnings before interest and taxes of $699m.
Amcor says in its rigid packaging segment, net sales decreased in constant currency terms after excluding a “2.4 per cent unfavourable impact from the pass through of lower raw material costs, with no impact from volumes but unfavourable mix compared to the prior year”, the company said in a statement on the ASX.
Amcor CEO Ron Delia said the company has delivered a good first half result and its outlook for fiscal 2020 adjusted EPS growth has improved by 7 to 10 per cent.
“The integration of the Bemis business is on track and the combined flexible packaging business has achieved mid single digit organic growth in addition to the delivery of synergy benefits,” he said.
“We are making good progress capturing synergies with momentum building ahead of our initial expectations and we are excited by the opportunities for the combined business as we look ahead.
“Amcor’s financial profile remains strong and will be enhanced further as we realise the full financial benefits from the Bemis acquisition. With over $1 billion of annual free cash flow, we are well placed to generate strong returns for shareholders by simultaneously investing in our core business, paying a compelling dividend, buying back shares, and growing through acquisitions.”
At the time of writing, Amcor’s shares were trading at $15.04.
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