Amcor profits jump on at-home consumption [IMG] Simon...

Amcor profits jump on at-home consumption

Simon EvansSenior Reporter
May 5, 2021 – 5.01pm

Amcor, the world’s largest consumer packaging company, has lifted its full-year profit guidance as it continues to reap the benefits of elevated levels of at-home consumption of food and beverages in the pandemic.
The company’s shares climbed to a five-month high on Wednesday after it announced strong third quarter profits and signalled that earnings per share growth for 2020-21 would be higher than a previously foreshadowed band.

Amcor is the world’s largest consumer packaging company and has been a big beneficiary of the rise in at-home consumption of consumer staples.
JP Morgan analyst Brook Campbell-Crawford said it was a “strong overall result”.
He said earnings before interest and tax margins were about one percentage point ahead of estimates and this was despite raw material impacts in the third quarter.
Amcor shares gained 2.7 per cent to $15.81 on Wednesday. The stock was as high as $16.50 in November last year. It tumbled to below $10 in March 2020 in the big sharemarket sell-off which caused mayhem for many investors.



The company has been benefiting from rising sales by retailers in categories including meat, cheese, sauces, beverages and pet food in the major markets in which it operates, which include the United States and Europe.
Amcor operates 230 packaging plants around the world. Government restrictions and lockdowns around the world are in various stages as another wave of the pandemic rolls through in many countries, even though vaccination programs are well underway in many countries.
Amcor said it had realised $US55 million ($71 million) in cost synergies from the $9 billion acquisition of Bemis Co in the United States on a year-to-date basis and it was well-positioned to deliver at least $US180 million by end of 2021-22.
Amcor shifted its primary listing to the New York Stock Exchange in 2019 after the $9 billion buyout of rival packaging company Bemis Co, and a smooth integration is one of the attributes helping the company drive returns.
It declared a quarterly dividend higher than this quarter last year at US11.75¢. The payment date will be June 15.
Amcor raised its outlook for 2020-21 to adjusted earnings per share growth of between 14 to 15 per cent, higher than the previous band of 10 per cent to 14 per cent.
Adjusted earnings before interest and tax was up 9 per cent on a comparable constant currency basis to $US1.14 billion for the nine months to March 31.

Amcor chief executive Ron Delia said the business was performing solidly.
“Amcor is maintaining momentum and executing well in the face of a dynamic operating environment,” he said.
Mr Delia said the company was expanding production capacity at some plants to take advantage of strong demand in high-value segments.
The company has annual free cash flow of more than US$1 billion and has plenty of options for expansion.