Shares in Amcor spin-off Orora jumped almost 9.2% to $2.98 yesterday following the release of the packaging company’s solid full-year results for 2016-17.
The shares were the best performed among those in the ASX 200 on what was a mixed day of trading, thanks to Donald Trumps’ emotive language about North Korea.
Thanks largely to an improvement from its North American business, Orora posted its third successive year of double-digit earnings growth.
And like its former parent, Orora, is finding more joy from its offshore assets than in Australia with CEO Nigel Garrad saying the North American economy has better prospects over the next year than the Australian economy largely because of substantially cheaper energy prices and lower cost pressures on households.
Orora has 15 manufacturing plants and 60 distribution centres in North America, and 29 plants and 38 distribution centres in Australasia, and the $2.04 billion in sales revenue from the North American businesses saw it overtake Australasia as the company’s main revenue generator in 2016-17.
Orora, which was spun out Amcor in a de-merger in 2013, delivered a mere 1.5% rise in bottomline net profit after tax to $171.1 million for 2016-17.
But when one-offs were stripped out, the company produced a 14.4% rise in underlying net profit to $186.2 million.
Sales revenue rose nearly 5% higher $4.04 billion. Australasian sales revenue was up 2.3% to $2.0 billion, but North American sales were up 7.6% to $2.04 billion.
Orora will pay a partially-franked final dividend of 6 cents a share, up from 5 cents previously. With the interim of 5 cents a share (4.5 cents), the total payout for the year is 11 cents a share, up from 9.5 cents.
Orora Australasia produced a 6.6% rise in earnings before interest and tax to $213.6 million, while the North American business produced an 18.8% lift in EBIT to $117.5 million (indicating the margins in the US are far skinnier than in Australia).
