The rising cost of raw materials and a slow economy were identified as reasons why Amcor failed to reach expectations in its full year results. The global packaging company’s profit after tax was up one per cent to $391m for the year to June 30, 2005. There was a 49.9 per cent fall in annual net profit to $173.2 million for 2004/05, with the result dragged down by significant items. The final dividend increased from 16 to 17 cents per share, giving a full year dividend of 34 cents per share, up 6.3 per cent on the previous year. Operating cash flow for the year was $980m.
Amcor managing director and CEO Ken MacKenzie says despite the challenging conditions, the businesses recovered a substantial majority of the raw material cost increases and sizable savings were made through rationalisation and restructuring initiatives. One such restructure initiative was PET and Flexibles.
“Over the past five years, Amcor has divested non-core paper assets and established a global packaging presence with important market positions. There are good opportunities to improve earnings and returns from the existing portfolio, but to obtain these the organisation must focus on achieving superior execution in a number of key areas,” says MacKenzie.
“In particular, we must have strong market positions, be focused on our customers and their market segments, continually reduce the cost base and demonstrate improved capital management discipline.”
MacKenzie says Amcor will improve its returns to shareholders over the next three years, but admits that while economic conditions remain subdued in some markets and input costs continue to increase, there is considerable short-term uncertainty relating to volumes and margins. “In this environment it is not possible to comment on earnings guidance for the coming year,” he says.
