Amcor reports ‘consistent’ start to Q1 trading
The Australian-based company announced they were in line with expectations outlined in their full year results and they remain confident of delivering increase earnings in the 2012/13 financial year.
The firm said any acquisitions would focus on expanding the footprint in emerging markets, improving industry structure in developed markets; adding new technologies to capture additional value or bolt-ons that lower the cost position.
In the firm’s AGM, Ken MacKenzie, managing director and CEO, said they would not pursue growth for growths sake.
“We are also interested in pursuing further acquisitions and have developed a pipeline of opportunities and prioritised them against strategic attractiveness.
“We will remain disciplined in how we pursue acquisitions and understand the benefits of patience and not paying too much.”
Segment performance
The Flexibles segment represents approximately half the group sales with end markets including food, healthcare and tobacco packaging.
Amcor said given these end markets are predominantly consumer staples, they are relatively defensive, and historical trading patterns have shown less volatility than many other industries.
For the overall Flexibles segment, the firm said Q1 had started very well and for the full year it is expected to achieve a solid increase in earnings driven by ongoing operating improvements and the benefits from recent acquisitions.
The Rigid Plastics segment has had a solid start to the year and the expectation that earnings will be moderately higher remains unchanged with continued benefits from the Alcan Packaging and Ball Plastics Packaging acquisitions.
Subdued economic conditions in North America have resulted in soft volumes in that region with hot fill custom volumes for the first quarter in line with the prior corresponding period. The South and Central American operations are tracking well with volumes ahead of the same period last year.
Slower Australasia start
The Australasia and Packaging Distribution business has had a slower than expected start to the year.
Volumes have been a little softer than anticipated with the Australian dollar putting pressure on both exports and imports. In a direct sense this impacts the fibre business, particularly cartonboard, and in an indirect sense it is with customers who export their products or compete against imports.
To help offset the above impacts, the Australasian business is undertaking a number of cost reductions and operating improvement initiatives and benefits from the new mill at Botany, New South Wales will begin in the second half of the year.
On the subject of facility safety, Chris Roberts, chairman of Amcor, said in the past financial year 180 plants had no single recordable case of injury.
“Although we are achieving world class levels on safety our performance has been marred recently by the death of a contractor at one of our plants in the United States. I can assure shareholders that we are undertaking a thorough investigation to understand the circumstances of this tragic accident.”
