Amcor reports strong first half profit

By Linda Rano

- Last updated on GMT

Related tags Amcor flexibles Amcor

Australian packaging company Amcor has announced a profit after tax
and before significant items (PAT) of AUS $185 million for the six
month period July to December 2007.

The company's managing director and chief executive officer Ken MacKenzie said: "The first half profit of A$185 million was a very solid result, given the strong Australian dollar. Around 70 per cent of Amcor's earnings are sourced offshore, mostly in North American and Europe, and the translation of these earnings into Australian dollars for reporting purposes, has a A$16 million negative impact on reported profit after tax​." Profit after tax and significant items was up 30.8 per cent from the same period last year to AUS $154 million. Profit before interest and tax is up 10.3 per cent for continuing business in local currency terms. Mr MacKenzie said "All segments reported higher earnings and this continues the momentum of our turnaround program​" Amcor consists of 5 business groups; PET (polyethylene terephthalate) packaging, Amcor Sunclipse, Amcor Australasia, Amcor Asia and Amcor Flexibles. Amcor Flexibles ​PBIT for Amcor Flexibles was up 0.8 per cent. ​Amcor Flexibles Food is a pan European business consisting of 26 plants in 13 countries serving major food market segments. The business also coordinates the wider strategy for flexible food packaging across other geographical regions. The company said: "Earnings for the half were up strongly as the business continued to lower its cost base, improve product mix and recover raw material cost increases". ​ There is an 'extensive repositioning program" being undertaken called Flex 1. This has already entailed the closure of two plants, one in the UK and one in Germany. The company says that "more than 75 per cent of the volumes"​ were retained and transferred to other sites. Further plant rationalisation is also planned. Again, in the UK consolidation of two flexographic printing sites has started with closure of a site in Ilkeston and relocation of production to a site at Evesham. The company said that an important component of future growth is expansion into Central and Eastern Europe, supporting the increasingly number of multinational customers in the region. A new plant in Poland, dedicated to PepsiCo for snack food products should be operational by May 2008. "This plant will be a global leader in extrusion lamination and is ideally located in a high growth, low cost region"​, said the company. Amcor PET Packing ​ PET packaging includes such products as bottles for sauces, oils and drinks. Profit before interest and tax (PBIT) on a continuing business basis and expressed in local currency terms was up 18.2 per cent. In June 2007 the European PET business was closed. USA​The company said its new US facility in Wytheville, Virginia, which supplies Gatorade containers, is now in full production. It has a capacity of over 1 billion units annually. ​ More than 20 brands of premium beverages have been introduced in PowerFlex, a new panel-less heat set container. The company said that this product "continues to gain momentum in the market place"​ . Latin America​Volumes were up 10 per cent with carbonated soft drink, 8.5 per cent with water and 18.1 per cent with custom containers. The company said that the "PET Packaging outlook for the second half of the year is for continued strong performance".

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