Amcor first-quarter results

Australian packaging group Amcor Ltd said a strong first quarter result was likely to set the trend for the year as the group proved resilient in the face of a tough global economic outlook.
Amcor sa…

Australian packaging group Amcor Ltd said a strong first quarter result was likely to set the trend for the year as the group proved resilient in the face of a tough global economic outlook. Amcor said first-quarter 2001-2002 earnings before interest and tax (EBIT) were up 12% on a year ago and it expected to continue to deliver earnings growth in the current year. “The 12% at the EBIT level indicates a solid start and we certainly anticipate that sort of ongoing trend for the balance of the year,” Amcor claimed after the company“s annual general meeting. “There are other circumstances that might impact our business, but on a comparative basis we think the packaging sector is more resilient than others.” About 75-80% of Amcor“s packaging is used for food and beverages, an area which analysts see as a strong defensive area amid the current global slowdown. Analysts forecast a net profit before one-off items of A$ 281 million with a range of A$ 250 million to A$ 311 million for the 2001-2002 financial year. In Europe, Amcor“s first quarter EBIT increased 61% driven by the merger of its flexibles business with Demark“s Danisco Flexible and the majority of operations of Akerlund & Rausing. Amcor said plants at Bialystok, Poland, and Oakbank, UK, which together employ 230 people, were due to close over the next few months. The company plans to close another two European plants and restructure another three, leading to total job losses of 900 to 1,000 people in the European operations. Amcor said that it would construct a A$ 21-million plastic closure (screw top) plant in Ontario California with partner Bericap Group. The plant would be completed in June 2002. Amcor said it would probably further cut dividend payments which have historically been around 80% of profits. Chairman Chris Roberts said dividend payments would be affected by taxation and franking issues and the company was also looking at retaining more cash to fund its growth phase.