Amcor adds to profits as PET packaging segment has an outstanding year

22-Aug-08

Australian packaging company Amcor has announced a 9.4% increase in profit after tax and before significant items (PAT) of AUS $369 mln for the year ended June 2008. This increase carries forward the positive momentum established over the past 18 months. Amcor consists of 5 business groups; PET packaging, Amcor Sunclipse, Amcor Australasia, Amcor Asia and Amcor Flexibles. Amcor has continued to offset inflationary pressures resulting from oil price hikes through higher selling prices, reflecting in its growth in earnings. The major contributor to this growth in profit has been the company's polyethylene terephthalate (PET) packaging segment. Profit before interest and tax (PBIT) on a continuing business basis and expressed in local currency terms was up 29.3% to US$198.8 mln. This segment in particular had an outstanding year as a result of the strategy of focusing on the higher growth, custom containers segment, where it has a strong market position, supported by industry leading technology. Returns for the business have increased from 9.2% to 12% over the past two years. The company's new US facility in Wytheville, Virginia, which supplies Gatorade containers, had its first full year of production. It has a capacity of over 1 billion units annually. However, higher inflationary costs are no longer able to be fully absorbed by productivity improvements or operating cost reductions in its PET packaging sites and need to be recovered through higher selling prices. Production volumes were up 6.8 per cent in Latin America, according to the report, with carbonated soft drinks and water showing an increase on the previous year of 5%. Custom containers now comprise 18.1% of the product mix, up 1.4% on the 2006-2007 year. The ongoing replacement of glass with PET is one of the factors continuing to support overall growth in the region.