Amcor profit declines in last six months of 2011

19 February 2012 (Last Updated February 19th, 2012 18:30)

Australian packaging company Amcor has announced a 9.4% drop in net profits to $204.9m for the six month period that ended 31 December 2011.

Australian packaging company Amcor has announced a 9.4% drop in net profits to $204.9m for the six month period that ended 31 December 2011.

Amcor said the decline was primarily due to the cost of acquisitions and restructuring.

The company's underlying profit increased by 13.9% to $304.7m, owing to the benefits realised by the company through the acquisitions of Ball Plastics Packaging and Alcan Packaging.

Amcor managing director and CEO Ken MacKenzie said the acquisitions, which were made in 2009 and 2010 respectively, have delivered cost synergies and enabled the businesses to improve their value proposition to customers.

In the period, Amcor's flexibles and rigid plastics businesses each posted improved first-half profit before interest and tax (PBIT), while the Australasia and Packaging Distribution business posted a 10% decline in PBIT.

However, the underlying earnings in the Australasia and packaging division were broadly in line with the same period a year ago, after adjusting for a $7m profit on asset sales in the prior period.

Amcor expects the growth in the flexibles business to continue in growing markets and volumes to be stable in mature markets, while in rigids, earnings growth was expected to be generated over the full year.

In the company's Asian flexibles operations, capital expenditure stood at 150% of depreciation, with new capital focused on an increasing capacity to meet the growth experienced in the markets.

Amcor has also reached an agreement to buy out the minorities in two Chinese plants and signed an operations agreement to purchase a tobacco packaging business in Argentina.