Amcor profits soar as post-Alcan closures set to continue
The Melbourne-based packaging giant today posted first-half sales of AUS$6.2bn (£3.9bn), 51% up on the same period a year ago, and pre-tax profits of AUS$478m, up 59%.
The completion of the Alcan acquisition a year ago strongly boosted the figures.
In its Flexibles division, which accounts for much of Amcor’s European business and reports in euros, Amcor’s first-half sales rocketed 159% to €2.2bn, while pre-tax profit rose 146% to €198m.
In this morning’s statement, Amcor chief executive Ken MacKenzie (pictured) said: “The half year result was particularly pleasing. Profit increased 55% which was a strong performance given the relatively subdued economic conditions.
“The integration of the recent acquisition of Alcan Packaging is proceeding very well… We expect the positive impact of realised cost synergies in the full year result to be between $100 million and $120 million.”
Since the Alcan deal completed, Amcor has announced the closures of six facilities, with three plants already closed. These include the fire-hit Livingston flexibles plant in the UK, flexibles factories in Russia, Italy and Australia and a tobacco packaging plant in Malaysia.
Today’s statement said that in Amcor’s Flexibles Europe and Americas business, “there are likely to be further plant closures to be announced in 2011 as the business takes the opportunity to exit unprofitable commodity segments and to remove capacity”.
Price rises cost €14m
Amcor warned on the impact of rising raw materials costs, which have forced it to pass on price rises to customers.
It said that its Amcor Flexibles Europe and Americas business had seen PET film prices rise 80% in the six months to 31 December 2010 and said that the lag in recovering the increases had cost it around €14m in the period.
Amcor’s statement said: “Raw material input costs continue to increase… It is difficult to estimate the magnitude of this impact [but] if current costs remain unchanged, for the balance of the second half it could be of a similar magnitude to the €14m experienced in the first half.”
Tobacco boost
In its tobacco business, Amcor said that it was benefiting in western Europe from increasingly complex requirements from customers such as varnishes, lacquering, embossing and foil stamping.
In eastern Europe, meanwhile, it said that the introduction of health warnings requiring more complex print was also benefiting the sector which, it said, had a strong half year.
Australian floods
Amcor also revealed that it was affected by the floods that struck a large swathe of eastern Australia in recent weeks.
However, it said that the financial impact of the floods was not yet clear.