Amcor: wine bottle plant good for group figures

Global packaging group Amcor“s AUD 140 million wine bottle-making plant has contributed to higher earnings recorded by the group in the first nine months of 2002-03, according to MD Russell Jones. He…

Global packaging group Amcor“s AUD 140 million wine bottle-making plant has contributed to higher earnings recorded by the group in the first nine months of 2002-03, according to MD Russell Jones. He highlighted the performance of the wine bottle plant and said a planned second glass furnace at the site also would “deliver good returns to shareholders”. Amcor said its profit before interest, tax and amortisation for the nine months to 31 March 2003 was higher 38% than the previous corresponding period. Much of the strong growth derives from the group“s European business, while Amcor Australia“s profit was up 13%. The company did not reveal dollar figures, although the 22 April 2003 announcement suggests it is will easily surpass the AUD 281 million underlying profit posted in 2001-02. In February 2003 Amcor posted a AUD 150 million interim net profit and its 4Q is seasonally the strongest of the year. Amcor“s wine bottling plant near Gawler, South Australia state, started production in May 2003. “The new wine bottle plant continues to be fully loaded and is making a positive contribution to earnings,” Mr Jones said. “Strong industry support through long-term supply agreements ensures the recently announced second furnace will deliver good returns for shareholders.” Amcor said March 2003 that expansion at the plant would require an AUD 125 million investment to double wine bottle production from mid-2005 and intensify the competition for market share between Amcor and ACI Glass Packaging, which has a plant at West Croydon, Victoria state. The only disappointments for Amcor in its first nine months were flat earnings at its Sunclipse corrugated packaging business in California and a 4% drop at Amcor Asia, which was hurt by difficult economic conditions and the SARS virus outbreak. “Although some of the operations are being impacted by local issues, the strength of Amcor today is that the size and breadth of the businesses ensures that overall the company can continue to deliver growth in earnings and returns,” Mr Jones said. “Earnings in Australia and New Zealand are delivering steady improvement and returns for this business should remain above 15%,” Mr Jones said.