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UPDATE 1-Australia's Amcor beats forecasts, sees sales holding up
August 21, 2012 / 1:05 AM / 5 years ago

UPDATE 1-Australia's Amcor beats forecasts, sees sales holding up

(Updates with second-half profit)

* H2 profit rises 8.9 pct

* Volumes seen resilient in current year

* Company sees further growth in China

MELBOURNE, Aug 21 (Reuters) - Australian packaging group Amcor Ltd beat forecasts with an 8.9 percent rise in second-half profit on Tuesday, boosted by acquisitions, and said it expected sales for packaging of staple goods to remain resilient.

Amcor said acquisitions, growth in emerging markets and cost cuts will also lift earnings in the current year.

More than 85 per cent of Amcor’s sales are in the food, beverage, healthcare and tobacco packaging industries, that has helped it weather subdued economic conditions in developed markets over the past three years.

Net profit before one-offs in the second half rose to A$329.9 million ($345 million) from A$303 million a year earlier, based on Reuters calculations. The result was above an average forecast of A$309 million from 12 analysts, based on Reuters calculations.

For the full year, revenue slipped 1.8 percent to A$12.2 billion.

But Amcor shares fell 2.3 percent on Tuesday to A$7.54, as investors had hoped for some capital management initiative.

Chief Executive Ken MacKenzie told reporters sales in Asia and Eastern Europe have remained strong, with emerging market growth led by a 13 percent rise in sales in China.

“In China, we see ongoing good consumer demand in the segments in which we operate,” MacKenzie said, pointing to food and healthcare packaging.

Amcor bought out a joint venture partner in two flexible packaging plants in Beijing and Chengdu in June, and expects to see further growth in the north and west of China.

Amcor said its flexible packaging business, including tobacco packaging, had a 16.9 percent rise in full-year earnings and should achieve a “solid” increase in earnings in the current fiscal year.

The rigid plastics division, mainly drink bottles, had a 13.4 percent rise in full-year earnings, helped by acquisitions, and earnings are forecast to be “moderately higher” in fiscal 2013.

Most of the company’s growth over the past two years has come from acquisitions, including five in the latest year and the Alcan and Ball businesses two years ago.

Reporting by Victoria Thieberger; Editing by Edwina Gibbs

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