Global packaging giant Amcor says solid growth in emerging markets such as China has contributed to a 21 per cent rise in profit from the group’s continuing operations.
Amcor on Tuesday reported a net profit from continuing operations of $326.6 million for the six months to December 31, 2013, up from $269.4 million one year earlier.
Amcor demerged its Australasia and Packaging Distribution business and created a separately-listed company, Orora Ltd, on December 31, 2013.
Including discontinued operations, Amcor’s first half profit was down 30.1 per cent at $159.3 million as a result of $220.5 million in significant items related to the demerger of Australasia and Packaging Distribution.
Amcor chief executive Ken MacKenzie said the first half result reflected solid growth in emerging markets, ongoing operating improvements and benefits from recent acquisitions.
“Volumes across developed markets were generally stable, and there was continued solid growth in emerging markets,” Mr MacKenzie said in a statement on Tuesday.
“China, one of our larger emerging market exposures, achieved sales growth of 18 per cent, of which 11 per cent was underlying organic growth and seven per cent was from acquisitions.”
Amcor’s flexible packaging operations increased earnings by 7.2 per cent on a constant currency basis, mainly as a result of acquisitions and despite subdued economic conditions in developed markets.
The operations in China continued to perform well and were gaining market share with a number of large customers.
Following Amcor’s acquisition of the flexible packaging operations of Jiangsu Shenda Group in October 2013, Amcor was now the market leader in eastern China.
Tobacco packaging in Asia also had an excellent half year, but industry volumes fell in Western Europe as the subdued economy there drove smokers to roll-your-own and illicit products.
The rigid plastics business generated higher margins and returns despite a cool, wet summer in North America and the subdued US economy.
Mr MacKenzie said Amcor had an exciting growth agenda through both organic growth and acquisitions.
“It is expected Amcor will deliver another year of higher underlying profits in the current year,” he said.
Shares in Amcor dropped 45 cents, or 4.2 per cent, to $10.33.
