Amcor also reports that the negative impact from translation of overseas earnings to Australian dollars on profit after tax and before significant items was negative A$16.4m, and significant items – primarily relating to the acquisition of Alcan Packaging businesses and planned restructuring – were an after tax loss of A$77.5m.
Earnings per share before significant items of 15.6 cents were down 18.3 per cent, which the company attributed to the additional shares on issue resulting from the equity raising to fund the Alcan Packaging acquisition.
Amcor says its volumes in all Australasian businesses were lower than the same period last year with the exception of the beverage can business, due to the economic conditions in New Zealand, which remain particularly difficult and have been substantially weaker than the previous period.
However the company continues that offsetting this, the business benefited from a number of cost reduction initiatives that were implemented over the past 12 months, which included a 10 per cent cut in staff and a focus on lowering procurement costs. There was also improved operating performance, particularly in the beverage can and corrugated operations. Overall, Amcor Australasia’s profits were A$74.8m, 0.7 per cent higher than the same period last year.
The company also received a strong result in Asia, reporting a 41.7 per cent increase in profits to A$9.7m however these results exclude the investment in the Hong Kong publicly-listed company, AMVIG, which has not yet reported earnings to 31 December 2009.
Commenting on the results, Ken MacKenzie, CEO of Amcor’s says the half year result was particularly pleasing given economic conditions were considerably weaker than the previous comparative period.
He says, “Excellent management of costs across all the businesses helped offset the impact of lower volumes in some sectors and on a constant currency basis profit before interest and tax for the half was up.”
MacKenzie continues, “Within the Flexibles group the healthcare and tobacco packaging operations had particularly strong performances with volumes resilient to slowing economic conditions. The food flexibles business experienced lower volumes which were, in part, offset by lower costs and improved operating efficiency.”
Analysts gave the report a thumbs up with a 2.51 per cent rise in Amcor’s share price today.
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