The world’s largest consumer packaging business Amcor saw its profits surge by 65 per cent in the first six months, on sales that were largely flat, with the company benefiting from stay-at-home consumer demand in the pandemic year.
Net profit rose to US$417m from US$252m in the prior corresponding six month period. Amcor achieved a rise in profit margins, up to 13.5 per cent from 12.4 per cent the previous year. It lifted its full year profit forecast on the back of the six month figures, and lifted its dividend payout.
Food, beverages and pet food were standout performers for the business as home consumption shot up, although healthcare softened as elective surgeries were cancelled round the world to free up space for coronavirus patients.
Sales for the six months for the company, which is now listed on the New York Stock Exchange following its $9bn buyout of Bemis, totalled US$6.2bn (A$8.2bn) which was a sliver up on last year’s US$6.18bn. However on constant currency basis sales the figures represented a three per cent rise.
The company achieved strong results in both its main divisions, flexibles and rigids, with EBIT growth of nine per cent in flexibles and ten per cent in rigids. Flexible sales were US$4.85bn, which was a US$4m increase in the prior year, while rigids were US$12m higher at US$1.352bn.
Ron Delia, CEO of the business, which now operates with some 250 plants around the world, signalled this year would see the company using its $1bn annual free cash flow to acquire businesses, invest in its own business, and repurchase its shares.
Delia said: "Amcor delivered strong financial results ahead of our expectations for the first half, and we have raised the outlook for the full year, as our teams continue to demonstrate resilience and outstanding execution."
"Sales growth of three per cent was balanced across our businesses and regions, cost performance has been strong and synergies from the Bemis acquisition are running ahead of schedule. We have built momentum in both operating segments.
"Amcor's investment case remains as strong as ever. We are well positioned to continue generating growth from attractive consumer and healthcare end markets, our leadership and scale in emerging markets and our extensive innovation capabilities.”
According to Amcor strong consumer demand reflects higher at home consumption of packaged beverages, supported by higher retail sales in multi-pack formats across a range of segments. Growth was also driven by several launches of brand extensions and new health and wellness oriented products in PET containers. Specialty container volumes were also higher than the prior period with continuing growth in certain categories including spirits, personal care and home cleaning.
