But the Australia-based packaging giant added that profit after tax excluding the Alcan acquisition bill for the year ending 30 June 2010 reached A$409.2 million – an increase 13.5%. The firm revealed it had also been hit by A$58m due to the negative impact of currency exchange from oversees revenues into Australian dollars.
Despite the huge costs associated with the buyout of Rio Tinto’s packaging arm for around US$2bn earlier this year, Amcor declared that it had bought the company at the best possible price.
“Amcor took the opportunity to purchase Alcan Packaging at the right time, acquiring the business at bottom of the cycle earnings and at a bottom of the cycle multiple,” said company managing director and CEO Ken MacKenzie. “By conservatively funding the acquisition, our balance sheet has remained strong.”
He added that integration of Amcor with Alcan and the recently acquired Ball Plastics Packaging companies were on target.
Amcor reconfirmed that it still expected to make between A$200-250m savings as a result of the Alcan buyout with almost half of this amount set to be realised in the 2010/11 financial year.
MacKenzie said the results were “pleasing given the ongoing difficult economic conditions” and the “defensive nature” of the food and beverage markets.
In its flexible division year-on-year profit before interest and tax (PBIT) had risen almost 70 per cent to A$252m. Amcor identified the Asia Pacific region as the fastest growing area and said it would concentrate its efforts on growing its markets in Australia, as well South East Asia, India and China. It added it would not be focussing on the South Korean or Japanese markets – characterising these as mature, low growth and insular with firmly entrenched competition.
The firm described its performance in rigid plastics as “solid” with year-on-year PBIT rising just US$1.6m to US$186.4. Lower volumes in North America were offset by performance in Latin America.
“Volumes in North America have been seasonally stronger in the fourth quarter and into the start of the 2011 financial year due to the record warm temperatures across most of the mid west and Atlantic coast,” added MacKenzie.
Other positives for the company included a 56 per jump in earnings for its Australasia and Packaging Distribution business compared to the same period last year. I third glass furnace – costing A$150m also began commissioning the H2 which was “an exciting opportunity to enter the growing beer bottle market”, said Amcor