Global packaging giant Amcor full year results show its profit after tax increased 9.6 per cent to US$671m (A$883m) from US$701m (A$844m) in the prior year, however its sales revenue dropped 3.4 per cent from US$9.4bn (A$11.8bn) from the previous year to US$91.bn (A$11.4bn).
Amcor’s earnings per share (EPS) is at 60.6 US cents, up 10.1 per cent on constant currency basis and its underlying profit for full year came in at US$701.2m (A$883m).
Amcor says it achieved strong returns, measured as profit before interest and tax to average funds employed of 20.4 per cent.
Its rigid plastics division suffered a 14.3 per cent decline in sales revenue from US$3.3bn (A$4.2bn) in 2016 to US$2.8bn (A$3.6bn). However its Flexibles division saw sales rise to $6.2bn from $6bn the year before.
Amcor says sales for the period were moderately higher than the prior year, even after being negatively impacted by approximately US$50m, as the business passed through lower than average PET resin costs to customers during the year.
[Related: Amcor boosts overseas drive]
Ron Delia, CEO, Amcor says, “Amcor’s strong full year results reflect the progress we have made on our strategic investments and the benefits of our broad mix of geographic exposures. Underlying PBIT and EPS grew 9 and 10 per cent respectively on sales growth of 4 per cent for the year, and cash flow was at the high end of our expectations.
“Balanced earnings growth from a variety of sources again demonstrated the resilience of Amcor’s business and management teams. Earnings were up strongly in both the flexibles and rigid plastics segments, driven by organic growth and acquisitions. Across development markets, earnings grew at rates which exceeded overall market growth. In emerging markets, we delivered increased earnings in the face of difficult conditions in several countries.
“Important progress was made again our strategic priorities with investments in the Alusa and Sonoco acquisitions and the proactive restructuring initiatives in the flexibles segment. Together, these investments contributed around US$60m to PBIT and they will underpin more than US$100m of additions PBIT growth over the next three years, in addition to organic growth and further M&A.”
The negative impact on PAT of translating US dollars earnings into US dollars for reporting purposes was approximately US$14m. Of this amount, approximately, US$4m reflects a 2 per cent appreciation of the average exchange rate for the US dollar against the Euro, from 0.9011 in the prior year to 0.9180 in the current year. The remaining US$10m reflects a 4 per cent appreciation in the weighted average exchange rate for the US dollar against all other currencies.
Net debt was US$4.1bn (A$5.1bn) at June 30, $296m lower than net debt at December 31. Leverage, measured as net debt over LTM PBITDA was 2.7 times on June 30.
For the next financial year, Amcor says its net interest costs are expected to be between US$185m (A$233m) and US$195m (A$314m), in constant currency terms. Cash interest paid is expected to be in line with the profit and loss charge.
Delia says, “We expect another strong year in 2018, with after tax earnings growth in constant currency terms and strong cash flow. Amcor remains very well positioned to continue delivering against our value proposition for shareholders – the consistent delivery of 10 to 15 per cent of additional value each year.”
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