Manufacturing News

Packaging company Amcor doing well despite drop in first-half profit

Packaging company Amcor can expect to deliver a higher full year profit on the back of strong sales growth, despite a drop in interim profit.

The Business Spectator reports that the company posted a net profit of $159.3 million for the six months to December 31. This was a 30.1 per cent decline compared to last year’s corresponding result of 227.9 million.

The fall in profit can be attributed to costs from the demerger of its Australian packaging and distribution division.

For the same six months to December 31 revenue from continuing operations was $5.203 billion. This was a 14.5 per cent increase compared to the previous corresponding six months.

Amcor managing director Ken MacKenzie said of the result – “During the first half the company successfully demerged the Australasian and Packaging Distribution operations and created a separately-listed company, Orora Limited.”

“The demerger will enable both companies to be more focussed on their respective end markets and better positioned to deliver further improvements in customer value.

“Volumes across developed markets were generally stable and there was continued solid growth in emerging markets.”

As The Australian reports, CLSA analyst Scott Hudson said the Amcor result was a good one.

“I think the stock (being) down by 6 per cent was an overreaction to be honest,” Hudson said.

“They have 9 per cent organic growth in emerging markets, they still have growth opportunities in acquisitions and they are continuing to make acquisitions. It points to better cashflow performance in the second half.”

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