Acquisitions drive Amcor financial results

By Kate Tilley
Correspondent

Published: September 24, 2012 6:00 am ET

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Global packaging supplier Amcor Ltd. of Melbourne said it expects another year of higher earnings thanks to key acquisitions and growth in its flexible packaging division in China.

Amcor manufactures PET containers for beverages, flexible packaging for the food and health-care markets, tobacco packaging and corrugated boxes.

In a report to investors on its fiscal 2012 results, Amcor said its flexibles business is set to grow in China, after it took full ownership of factories in Beijing and Chengdu. Amcor previously held 75 percent and 40 percent interests in those plants, respectively.

“These acquisitions provide the business with additional leverage to growth opportunities being pursued in the north and west of China,” the report said.

Amcor’s Chinese flexibles business has seven plants. Sales in China for the year ended June 30 increased 13 percent.

Across all locations, the flexibles division’s profit before interest and tax increased 10.1 percent to A$683.3 million (US$713.6 million) and sales rose 3.7 percent to A$6.1 billion (US$6.4 billion).

Across all divisions, Amcor posted record results. Profit after tax and before significant items increased 11.3 percent to A$634.9 million (US$663 million) and returns increased from 14.1 percent to 15.9 percent. The company completed a share buy-back worth A$150 million (US$157 million).

Amcor Managing Director and CEO Ken MacKenzie said: “To achieve an 11.3 percent increase in underlying earnings was an outstanding effort, given subdued economic conditions and a $35 million (US$37 million) adverse impact on reported earnings due to the appreciation of the Australian dollar.”

The rigid plastics division’s profit before interest and tax increased 8.8 percent to A$264.1 million (US$275.8 million). Successful integration of the Ball Plastic Packaging Americas acquisition drove the growth.

MacKenzie said two “transformational acquisitions” during the global financial crisis — Alcan Packaging and Ball — were key earnings-growth components for the fiscal year. He said both acquisitions’ integration programs are ahead of schedule in timing and synergy benefits.

In 2010, Amcor bought parts of Rio Tinto Group’s Paris-based Alcan Packaging business for about US$2 billion and acquired Ball Americas’ assets for US$280 million. Ball was a unit of Broomfield, Colo.-based Ball Corp.

However, the Australian economy’s uncertain outlook and the high Australian dollar have affected the earnings of Amcor’s Australasia & Packaging Distribution businesses.

Amcor said the division’s profit before interest and tax decreased 4.5 percent to A$152.5 million (US$159.3 million). Sales increased only marginally, by 1.3 percent, to A$2.9 billion (US$3 billion), but MacKenzie said it was a “solid performance.”


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Acquisitions drive Amcor financial results

By Kate Tilley
Correspondent

Published: September 24, 2012 6:00 am ET

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