Amcor expects lift in profit

Global packaging company Amcor Ltd. expects its full year net profit to rise by around 9%, after a strong performance in Europe helped boost its third quarter result.
The full year increase was expec…

Global packaging company Amcor Ltd. expects its full year net profit to rise by around 9%, after a strong performance in Europe helped boost its third quarter result. The full year increase was expected to be in line with a 9.3% rise in the company“s net profit for the nine months to the end of March, it was reported on 19 April. Amcor also reported a 17.5% increase in net profit for the three months to 31 March 2002, compared to the same period a year ago. No dollar figures were provided. “The 17.5% increase in profit after tax for the March quarter was particularly pleasing and after a slow first quarter, the 9.3% increase in profit after tax for the nine months to March is indicative of how we see the full year result,” managing director Russell Jones said. Mr Jones said Amcor“s strategy of selling mainly into the food and beverages industries over a broad geographic area helped it deliver consistent earnings growth with relatively low volatility. One analyst, who did not want to be named, told AAP the expected full year result was slightly above market consensus. The analyst said Amcor“s full year net profit was likely to be around US$ 260 million, after securities distribution payments. Net profit for 2000/01 was US$ 282.4 million, boosted by a US$ 41.3 million significant gain. Another analyst expected a US$ 260.6 million profit this year. Australasian earnings for the nine-month period were in line with expectations, with profit before interest and tax down three per cent. This was offset by strong gains in the European and North American operations. Profit before interest and tax for the European operations increased significantly – up 218% – and incorporated the expanded European flexibles business. Amcor said the Amcor Flexibles Europe (AFE) restructuring programme remained on schedule with UK, French and Polish plants already closed and the plant in The Netherlands scheduled to close during the European summer. Restructuring at the Denmark, Sweden and France plants had proceeded as scheduled and AFE remained on target to deliver US$ 25 million in synergies in year one. One analyst said the only risk for Amcor in Europe was the danger that oil prices would rise. “The risk is oil prices going up which might put pressure on raw materials prices, which would then need to be passed on to the consumer,” he said. Combined profit before interest and tax for Amcor“s North American businesses rose 14% for the first nine months of the year. Asian profit before interest and tax was up 6%. Amcor booked a 19.6% increase in net profit to US$ 147.1 million for the first half of the current financial year. The first half profit was US$ 129.9 million after taking into account securities distribution payments of US$ 17.2 million.