Beverage packaging manufacturer Orora has delivered a strong half-year result with underlying net profit after tax (NPAT), sales revenue, EBITS and underlying earnings per share all increasing on the prior corresponding period (PCP).

NPAT before significant items was $102.7m, up 12.9 per cent on PCP, sales revenue was $1.98bn, up 9.6 per cent, EBITS was up 10.4 per cent to $154.5m and earnings per share was 11.8 cents per share, up 22.9 per cent.

Understandably Orora’s Chief Executive and Managing Director, Brian Lowe, was very happy with the group’s performance.

“I am pleased to report that Orora delivered a strong result for the first half of the fiscal year 2022. Our performance reflects the unwavering focus of our team on executing our strategic priorities in the context of a global pandemic,” Lowe said.

“The Group reported an increase in underlying net profit after tax and underlying EBIT on the prior corresponding period, demonstrating the continued strength of the Group’s diversified packaging assets and sustainable earnings.”

Detailing some of the strong areas for the business, Lowe said: “Our North American business produced another outstanding result in the first half, continuing to drive improvements in operating and financial performance, exercising pricing discipline in a higher inflation operating environment and delivering strong earnings growth in both the manufacturing and distribution OPS businesses.

“And we are pleased with the Australasian business which reported a solid result, having largely mitigated the impacts of lower wine glass volumes as the impact of Chinese tariffs on Wine were cycled, with 100 per cent of this capacity now redeployed to new product categories. Cans demand remains strong, with solid volumes achieved across all categories.”

Lowe said that the spirits and olive oil sectors had helped take up the glass capacity that became available as a result of the volumes caused by the Chinese tariffs.

He added: “Underpinning our results is the ongoing commitment to the Group’s corporate strategy, with clear strategic priorities formulated for each business unit. A strong balance sheet and operating cash flow ensures Orora is well positioned for growth, and continues to provide operating and strategic flexibility as we move forward. Our team remains disciplined and focused on delivering against our strategies, and I look forward to continuing our positive momentum in FY22.”

The company also said that it is forecasting FY22 EBIT to be higher than FY21, and while this outlook remains subject to global and domestic economic conditions, currency fluctuations and the continuing impacts of the COVID-19 pandemic, Lowe told The Shout the business is well-placed to manage concerns over domestic interest rate rises and inflation in the US.

“Certainly from an Australasian perspective, we are very confident in the business based on the diversity of industries or segments we supply within the beverage categories; they have proven to be very defensive industries, regardless of economic conditions,” he said.

“In North America, our focus and our performance is not driven by the buoyancy in parts of the economy. In fact, most of our top line growth has been based on passing through those cost increases and we’re really focused on improving the margin and quality of earnings in the business.

“We think we’ve got some good opportunities in certain segments to continue to grow that business.”

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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