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Restructure the full package for Amcor

Christian Edwards  |  22 Aug 2017Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Amcor (ASX: AMC) more than doubled its annual profit to $US597 million ($A752 million) after acquisitions dominated a year of strategic restructuring.

While the packaging giant delivered a profit well beyond last year's $US244.1 million, revenue from ordinary activities for the year to June 30 fell 3.4 per cent to $US9.1 billion ($A11.5 billion).

Deutsche Bank research analyst Mark Wilson said the results were broadly in line with expectations, with good underlying growth in earnings before interest and tax (EBIT) and sound cash flow.

"The company expects flexibles to deliver another year of strong EBIT growth given incremental restructuring benefits of $US25 million to $US30 million, incremental net synergy benefits of $US10 million to $US15 million, and modest organic growth," Mr Wilson wrote in a note to investors.

Amcor has made acquisitions across the US, South Africa, Brazil, China, and India as part of a restructure to streamline operations and reduce overheads.

Amcor chief executive Ron Delia said the results reflect progress as well as the geographic breadth of strategic investments.

"In the Asia Pacific, sales revenue and volumes were higher, including in China, but conditions in Australia and New Zealand were quite muted," Mr Delia said.

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Profit from Amcor's rigid plastics business of bottles and boxes--adjusted to exclude $US40 million related to the hyper-inflation swamping its six Venezuelan plants--increased by 8.6 per cent on a constant currency basis.

Its flexible packaging business including food wrappings, paper or aluminium foil lifted profit 8.2 per cent, also stripping out currency fluctuations.

Looking ahead, Amcor remains most bullish about its North American prospects--where sales topped $US3 billion and market share is targeted at 3 per cent growth.

Mr Delia told investors the company expects further organic progress in 2018, with post-tax earnings growth in constant currency terms and strong cash flow.

"Amcor remains very well positioned to continue delivering against our value proposition for shareholders--the consistent delivery of 10 to 15 per cent of additional value each year," Mr Delia said.

Amcor shares were 9 cents higher at $16.095 at 1510 AEST.


* Net profit $US597m v $US244.1m

* Revenue down 3.4pct $US9.1bn

* Final dividend up 1.5 cent to 23.5 US cents


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