Shares in Amcor rose in yesterday’s lacklustre market as the global packaging giant revealed that it is overcome the stronger Australian dollar and almost doubled full year profit to $356.7 million for the 12 months to June 30.
Amcor said yesterday the stronger dollar had cost $80 million in lost profits.
The result, detailed to the ASX early yesterday followed a year of consolidation after buying the Alcan Packaging business.
Profit for the year was 95% above the $183 million earned in 2009-10, while earnings after tax and before significant items of $570 million, were up 39%.
The company reported one off costs of $213 million, which it said were after tax and linked to the trade practices class action case. In 2010 it reported one offs of $226 million, which were main restructuring costs.
The shares jumped 47c to a day’s high of $7.03, before easing to end up 17c or 2.6% at $6.70.
That was in a market strong early on, but which faded as the day went on to close down half a per cent.
Revenue jumped a solid 26% to $ 12.4 billion.
The company will pay a final dividend of 18 cents per share, compared with 17 cents a year earlier.
That takes the payout for the year to 35c, up 18% from the 29.5c paid for all of the 2010 financial year.
Amcor also said it would buy back up to $150 million worth of shares in an on-market buyback.
"Amcor, as a global leader in our chosen market segments, is well positioned to deliver sustained growth and improving returns to shareholders," chief executive Ken MacKenzie said in the statement.
Amcor said the benefits from the Alcan Packaging takeover in the 18 months of ownership had exceeded expectations.
The cost benefits from the takeover had increased 25% from the expectations at the time of the takeover and were now at $200 million.
Amcor said it had undergone a substantial transformation including the takeover of Alcan and Ball Plastics Packaging.
"The significantly improved earnings and strong cash flow, positions the Company to accelerate growth in attractive market segments," Mr MacKenzie said.
Amcor said it was hit with significant cost pressures in the year.
"In the 2011 year, raw material costs increased substantially. It is estimated that aggregate cost increases on an annualised basis were more than $800 million, with the most significant components of this increase in resin based products and aluminium.
"The objective across Amcor is to minimise the impact on earnings due to the movement in raw material input costs.
"The higher input costs in 2011 predominantly impacted the Rigid Plastics and Flexibles segments.
"Both these businesses have rigorous mechanisms to recover rising raw material costs."
Given the outlook here, Amcor’s forecast for the 2012 financial year for its Australasian packaging business was a very conservative one:
"There are a considerable number of variables in determining earnings for 2012, and expectations are likely to evolve as the year progresses.
"At this stage, the combined negative impact of an ongoing high Australian dollar and a weakening Australian economy means that earnings in 2012 will likely be in line with 2011."
But for the group as a whole, the company was more upbeat:
"Amcor, as a global leader in our chosen market segments, is well positioned to deliver sustained growth and improving returns to shareholders.
"In the 2011 year, earnings increased 39% and we expect to achieve higher earnings and returns in the current year."
Shares in Caltex Australia ended steady in yesterday’s generally weak profit after the oil refiner and petrol retailer revealed a sharp rise in profit, thanks to higher oil prices.
Caltex shares ended the day at $9.84 after revealing that net profit, on a historical cost basis, jumped 91%, to $270 million for the six months to June 30, 2011, compared with $142 million a year earlier.
But, on a replacement cost basis, it was down, 24%, at $113 million, the company told the ASX yesterday.
Both profits are within guidance issued on June 20.
Revenue increased 22% to $10.9 billion, up from $9.1 billion.
The company declared an interim dividend or 17 cents per share, fully franked, payable September 27. That’s down from the 30c a share paid for the first half of 2010.
Caltex said profit rose on an historical cost basis on the gains on crude oil and petroleum product inventories as the global oil prices rose.
The replacement cost profit declined because of operating disruptions hitting production levels and challenging external factors (i.e., the higher world oil prices, especially the price of Tapis crude in Singapore which is the key marker crude for this part of the world, as well as the strong Australian dollar).
Caltex said that marketing continued to deliver strong results, with fuel volumes rising by 4.3% on growth in commercial diesel, jet fuel, retail and premium fuels.
The company said its US dollar refiner margin was hit by events in Libya and Japan, while the rise in the Australian dollar reduced its local currency margins.
Caltex said its outlook remained positive.
"The Marketing outlook remains positive.
"However, despite improvements in the regional supply demand
