The company says this result reflects continued improving performances in local currency terms, across many of the group’s businesses, although a number of the issues outlined in the half year result have continued to negatively impact earnings growth.
Amcor says the 2004 full year profit result is anticipated to be in the range of $375m to $395m and it says the outlook for the 2005 year is for solid earnings growth, provided the Australian dollar and global economic conditions remain stable at current levels.
Amcor’s PET Packaging business for the nine months to March 31 recorded profits up by 6.7 per cent in local currency terms, however for the three months to March earnings were steady with the corresponding period last year. North America performed poorly, while Europe and Latin America posted good results.
Amcor Flexibles achieved an identical increase in local currency terms for the nine months of 6.7 per cent. However its the third quarter result was also below expectations with earnings marginally ahead in local currency terms versus last year, and the company is looking at plant closures in Europe, but is planning to build a new Greenfield site in Russia.
The Australasian business achieved a profit increase for the nine months of 12.8 per cent.
Amcor says the business achieved a solid result across most of the operations benefiting from the ongoing focus on costs and manufacturing excellence; however the higher Australian dollar did impact earnings, especially in the Recycled Paper Mills and Flexibles operations. The residual impact of the drought in Australia, especially in the dairy, fruit and produce segments also affected earnings in the Fibre Box, Flexibles and Sack businesses while Glass, Food Can and Cartons continued to deliver pleasing results.
Earnings in January and February were slightly below expectations, March and early April have shown good signs of improvement and the business is targeting full year earnings growth of around 10 per cent.
Amcor Asia continued to disappoint, for the nine months to March 31, profit was down 5.8 per cent in local currency terms. However for the three months to March earnings were up substantially on the corresponding period last year when Asia was in the middle of the SARS crisis.
Amcor says the improving economic conditions in Asia are reflected in increased earnings across all the divisions and the outlook for the balance of the year remains positive.
Profits at Amcor Sunclipse slumped, for the nine months to March 31, profit was down 20.1 per cent in local currency terms reflecting continued flat economic conditions in the US manufacturing sector.
At Amcor Rentsch and Amcor Closures profit was up 14.9 per cent in local currency terms.
Amcor’s managing director, Russell Jones says, “The results for the nine months to March have been impacted by a number of issues including poor economic conditions in a number of regions, the translational impact of the appreciating Australian dollar, some operational performances below expectations and increased costs in some segments of the US PET market.
“In response to these factors, targeted actions are now underway in the various business units. In the PET business, restructuring of both the West Coast of the US and Canadian operations will be undertaken involving plant closures and overhead reductions. Benefits of these actions will begin to flow in 2005 financial year.
“In Flexibles there is an ongoing examination of the manufacturing footprint with the likelihood of plant closures as well as significant organisation change to simplify the business and further reduce costs.
“Amcor has a record over the past five years of delivering consistent earnings growth compounding at more than 10 per cent per annum. This year earnings will be flat, however with the growth opportunities across a number of the businesses and reconfiguration of certain businesses in the US and Europe, it is anticipated that from 2005 sustainable double digit earnings growth will again be achieved.”
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