Amcor profits rise as sales dip

After adjusting for losses in Venezuela due to the unstable market, Amcor says its half yearly statement reveals a company in good health, with a strong flexible market making up for a less strong HY for rigid plastics.

Sales revenues for the half year are down slightly from 2016 HY levels, US$4.45bn from US$4.55bn, while profit before interest and tax is up by 3.5 per cent to US$495.7m on a constant currency basis.

Ron Delia, CEO and managing director of Amcor, says, “Growth in PBIT and EPS was 3.5 per cent and 4.6 per cent respectively in constant currency terms. The business delivered PBIT growth of 9 per cent and EPS growth of 12 per cent in constant currency terms after adjusting for Venezuela, where we have eliminated our financial exposure.”

Amcor reveals its net debt as US$4.2bn as of December 31, 2016, US$455.8m higher than net debt at June 30, 2016. The company says this reflects drawdowns funding acquisitions completed in the December 2016 HY.

The company achieved returns of 19.2 per cent, measured as profit before interest and tax to average funds employed, an operating cash flow of US$52.9m, and the interim dividend per share increased to 19.5 US cents.

Amcor says the dividend will be paid in AUD and will be 25.6 cents, reflecting the dividend declared in US dollars converted at an exchange rate of 0.7618.

“The rigid plastics business had an outstanding half year with earnings up 12 per cent,” says Delia.

“The flexibles packaging segment had a solid half year with constant currency earnings growth of 7 per cent."

Commenting on the outlook of the 2016/2017 financial year, Amcor says it is well positioned for continued growth and expectations for profit after tax have not changed.

“In constant currency terms, profit after tax is expected to be higher than the US$671m reported in the 2015/2016 financial year.”

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