Revenue at consumer packaging giant Amcor slipped by one per cent in the first half of the current financial year, on volumes that showed a two per cent increase over the prior corresponding period.
However, EBITDA rose by two per cent, EBIT rose by four per cent, and net income was up by five per cent, all on a constant currency basis, compared to the same period last year. The results were largely in line with guidance.
Net sales of US$6.6bn included an unfavourable impact of approximately one per cent related to movements in foreign exchange rates. Amcor said the pass through of lower raw material costs had no material impact on net sales.
Volumes were up by two per cent compared with the same six month period last year. However, Amcor said the price/mix had an unfavourable impact of approximately three per cent, primarily due to expected lower volumes in high value healthcare categories.
Adjusted EBIT of US$728m was four per cent higher than last year on a comparable constant currency basis, reflecting, says Amcor, higher volumes and strong cost performance, partly offset by unfavourable impacts from price/mix. Adjusted EBIT margin improved to 11 per cent, a four per cent increase over the prior year.
Amcor reiterated its full-year guidance. The stock market viewed Amcor’s first half outcome, and unchanged guidance, favourably, with shares rallying by 3.6 per cent on the day.
CEO Peter Konieczny said, "Amcor delivered a solid second quarter result aligned with the expectations we set out in October, giving us the confidence to again reaffirm our guidance for the fiscal year. We continued to execute well on our underlying business, delivering our fourth consecutive quarter of sequential volume improvement. Margins continued to expand, supporting adjusted EBIT and EPS growth of five per cent on a comparable basis for the quarter."
The company continues to face challenges, as destocking continued in healthcare, and demand remained soft in the North America beverage business through the December quarter.
In flexibles, net sales were up by a smidgen to US$5.06bn over last year’s US$5.05bn, although volumes rose by three per cent, the disparity primarily due to lower volumes in high value healthcare categories.
In rigid packaging net sales of US$730m were achieved, which on a comparable constant currency basis, was approximately three per cent lower than last year, reflecting approximately two per cent lower volumes and an unfavourable price/mix impact of approximately one per cent. Adjusted EBIT of US$53m was 10 per cent higher than last year on a comparable constant currency basis, reflecting benefits from continued cost actions and higher volumes, partly offset by an unfavourable price/mix.
Taking the opportunity to refer to the company’s latest mega merger, Konieczny said, "We announced the next transformational step for Amcor, agreeing to combine with Berry Global. Bringing these two companies together will deliver on our strategy to become an even stronger company with accelerated volume-driven organic growth achieved through an unwavering focus on our customers, sustainability and portfolio mix.
"The combined company will have enhanced positions in attractive categories, the material science and innovation capabilities required to further revolutionise product development and a broader, more complete portfolio of primary packaging solutions for consumer and healthcare customers. With faster growth and US$650m of identified synergies, this combination will drive significant near and long term value for all shareholders. The path to completion is well advanced and we remain on track to close in mid-calendar year."
