Amcor has logged a 7.5 per cent increase in underlying profit, achieving an after tax before significant items figure for the year of US$671.1m. It was the same figure as last year but Amcor said on a like for like currency basis it was the increased figure.
However the packaging giant experienced losses in sales and flexibles revenue. Sales revenue fell two per cent from US$9.6bn in 2015 to US$9.2bn while PBITDA remained flat at US$1.409bn.
Net profit slumped by 64 per cent due to a pre-announced impairment on its business sin Venezuela. Final figure was $244.1m down from $680.3m.
Earnings per share were up 11.3 per cent to 57.7 US cents, while the company’s free cash flow sat at US$311.2m.
Amcor CEO Ron Delia has praised the company’s performance despite operating in a ‘challenging macroeconomic environment’.
“The defensiveness and resilience of our businesses was once again evident with balanced growth across the portfolio,” Delia says.
“Growth was solid in both developed and emerging markets, there was a mix of growth from organic sources and from acquisitions and both the flexibles and rigid plastics segment achieved higher results than the same period last year.”
Amcor’s flexibles segment experienced a 3.6 per cent fall in sales revenue from US$6.2bn in 2015 to $6.0bn in 2016. PBIT also dropped 2.2 per cent from US$772m in 2015 to US$755m in 2016.
In June Delia revealed the company’s Venezuela rigid plastics business would face a $US350m impairment brought by poor economic conditions in the country.
Despite this, Amcor’s rigid plastics segment experienced sales revenue growth of 1.2 per cent from US$3.31bn in 2015 to US$3.35m in 2016. PBIT also surged 9.7 per cent to US$352m.
Amcor says, “As announced on June 9, economic conditions in Venezuela deteriorated during the period and impacted the business environment. There was no impact on PBIT during the 2016 financial year.
“However, compared with 2016, PBIT in the 2017 financial year will be negatively impacted by approximately US$40m.”
Amcor reports its tobacco packaging business had a particularly strong year with volumes across Europe significantly higher than last year.
In Western Europe demand increased across European Union member states, which the company attributes to customers stocking up before changes to tobacco laws came into effect in May 2016.
Amcor says the Asia tobacco business delivered good earnings growth, which it expects to continue with its new greenfield plant in Indonesia having started running this year.
In the Americas, earnings waned due to lower sales volumes in North America and higher operating costs in South America.
Delia concludes, “Against a backdrop of challenging economic conditions, the performance of the businesses was strong reflecting growth from acquisitions and robust organic growth in emerging and developed markets.
“The key drivers of earnings growth were higher tobacco packaging volumes, benefits from prior period acquisitions, excellent cost performance and strong organic growth in emerging markets.”
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