Amcor on line to reach stated profit

Global packaging giant Amcor Ltd. is on line to achieve its stated US$ 260 million full year net profit, representing a 9% lift over the previous year, according to analysts. The analysts believe Amco…

Global packaging giant Amcor Ltd. is on line to achieve its stated US$ 260 million full year net profit, representing a 9% lift over the previous year, according to analysts. The analysts believe Amcor“s drive for major acquisitions will have to be put to one side while it focuses on integrating the businesses it has acquired over the past 12 months. The company was expected to announce its full year results on Thursday 15 August. During the year ended 30 June, Melbourne-based Amcor spent US$ 2.875 billion for the PET and closures business of German giant Schmalbach-Lubeca AG. PET, or polyethylene terephthalate, is mainly used to make bottles and jars which package soft drinks and food. After this deal, PET will become Amcor“s biggest product, accounting for about 31 per cent of its sales. Amcor also picked up two UK flexible packaging plants for US$ 30.9 million to fit with its existing European flexible packaging business. Shaw Stockbroking industrial analyst Brent Mitchell estimates Amcor will achieve US$ 261 million net profit, after securities distribution payments. Amcor chief executive Russell Jones said at the time of the Schmalbach acquisition that it will realize US$ 75 million in synergies per annum by year three with US$ 20 million achieved in the first year. He 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 is forecasting a US$ 261.3 million profit, said Amcor will stabilize on the acquisition front, spending the next six months on the Schmalbach integration. He said Amcor will also have to manage rising resin prices in Europe, on the back of rising oil prices. The German acquisition lifted Amcor“s global stable to 51 plants in 20 countries producing an annual revenue of US$ 3.3 billion. Amcor has also acquired other businesses during the year – Canadian-based bottle manufacturer Pet Pak, the flexible packaging and extrusion operations of Spain“s Tobepal Group and CNC Containers in the US. A third analyst agreed with the US$ 260 million profit figure saying the focus for the coming year is going to be on the successful integration of their many acquisitions.