Packaging maker Amcor has almost doubled full year profit and expects to achieve more benefits from its acquisition of the Alcan Packaging business.
Amcor also said it would buy back up to $150 million worth of shares in an on-market buyback.
Amcor on Monday booked a net profit of $356.7 million for the 12 months to June 30, up 95 per cent from $183 million a year earlier, as it benefited from acquisitions and cut costs.
Profit was reduced by $80 million as a result of the high value of the Australian dollar.
Amcor will pay a final dividend of 18 cents per share, compared with 17 cents a year earlier.
Chief executive Ken MacKenzie said Amcor’s profit, the dividend return and the share buyback represented a good result for shareholders.
“The key components of this performance were earnings and recent acquisitions exceeding expectations,” he told reporters.
“Although economic conditions remain uncertain, the momentum of cost synergies (cost benefits resulting from acquisitions) already achieved and ongoing operational improvements in the acquired business underpin earnings growth for the next two years.
“The key drivers will be focusing on product innovation, expanding our position in emerging markets and further value-creating acquisitions.”
Amcor announced the acquisition of Alcan Packaging for $2.3 billion in August 2009 and bought US plastic packaging business Ball Plastic for $US280 million ($A326 million) in June 2010.
Mr MacKenzie said the acquisitions had transformed Amcor, giving it a wider range of products and the ability to offer greater value to customers.
Demand for Amcor’s products had not been immune to the global economic slowdown but had been resilient.
“Our market segments are defensive. So we’re supplying food, beverage and healthcare market segments. They tend to be consumer staples and as a result, our volumes tend to be quite resilient,” he said.
Demand growth over the next few years was likely to come from emerging markets such as Latin America, eastern Europe, Asia and India.
“We don’t anticipate a lot of growth over the next 12 months to come from mature markets, but we’re very excited by the growth prospects in emerging markets,” Mr MacKenzie said.
Mr MacKenzie said 17 per cent of Amcor’s business was in emerging markets and it was experiencing annual growth rates of 10 per cent, even under slower economic conditions.
He said one-third of Amcor’s portfolio could be in emerging markets in the next five years.
Growth in emerging markets was being generated by higher consumer spending and a trend to safer, high-quality food.
Amcor said its rigid plastics business had a strong year, with earnings up 29 per cent. The flexibles business lifted earnings up 78 per cent.
But the Australasia and packaging distribution business had a flat result after a cool wet summer affected demand for soft drinks and other beverages, and hence packaging.
Amcor shares closed 17 cents or 2.6 per cent higher at $6.70.
