Amcor's packaging spin-off will inherit a steadily improving new mill alongside up to $750 million of debt.
The group's Australasia & Packaging Distribution division, which will split from Amcor in December, turned over $2.9 billion for the 12 months to 30 June 2013, according to Amcor's annual results. That marked a 2.5% year-on-year rise.
The yet-to-be-named company will take ownership of the $500 million Botany recycled paper mill, where commissioning started in October 2012.
The mill was given a "comprehensive four-day maintenance shutdown" in July to take care of teething problems, many of which have now been fixed, according to Amcor.
"Following this shutdown the machine has the opportunity to progressively move to the next level of operating and cost performance," it said.
"During 2012-13, the mill progressively increased speeds and product range and the start-up performance to date is in the top quartile for its global comparator group."
[Facebook: Botany mill photos]
Botany is forecast to generate $50 million in annual cost benefits, which will begin to flow through this financial year.
Amcor said the new company would also benefit from another $31 million of savings generated by restructuring, exiting market segments and closing plants.
It will have a "strong cashflow", "strong balance sheet" and "well-invested asset base". It will also take on $700-750 million of Amcor's debt, which increased by 11.7% to $4 billion in 2012-13.
Amcor's underlying net profit grew 8.6% to $689.5 million while turnover rose 1.9% to $12.4 billion.
Chief executive Ken MacKenzie said the high Australian dollar wiped out $13.8 million of net profit.
"The key drivers of higher earnings were the benefits from recent acquisitions, ongoing growth from our businesses in emerging markets and continued improvement in operating performance," he said.
"In Australasia, the business has had over $1 billion of new investment over the past four years, creating low-cost positions in our chosen product segments.
"The benefits from this capital expenditure combined with a number of new cost-reduction initiatives underpin the opportunity for future growth."
MacKenzie said the future looked bright for Amcor. "Each of the business segments is expecting to deliver increased earnings in the current year and the strong cashflow generation will ensure there is the opportunity to deliver further growth in shareholder value."
[Related: More finance news]
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter
