Global packaging solutions provider Orora Limited has today announced its financial results for the half-year ended 31 December 2023, reporting sales revenue of $2.14bn, down 5.5 per cent, EBIT up 11 per cent to $184.1m, and statutory net profit of $68.2m.

Despite sales revenue being down, Brian Lowe, Managing Director and Chief Executive Officer, says this is a particularly exciting period for Orora having completed its acquisition of French glass bottles maker Saverglass on 1 December 2023 at a value of €1.31bn.

The financial report indicates that statutory net profit, at $68.2m, was down $49.9m due to significant item expense as a result of the acquisition, which gives Orora access to the premium and ultra-premium segment of the alcohol beverage packaging market.

The acquisition was funded by a fully underwritten equity raising of $1.34bn and $875m of long-term debt, with acquisition-related transaction costs predicted to have been $40.4m in the six months prior.

According to the financial report, implementation has commenced for combining Orora’s glass manufacturing plant in South Australia with the Saverglass portfolio to form a global network of high-performance production facilities.

Speaking about the results, Brian Lowe, Managing Director and Chief Executive Officer, said: “The period was marked by a significant milestone for Orora, with the acquisition of premium global glass business Saverglass completed in December. Against a backdrop of economic conditions, Orora once again delivered a solid earnings performance for the first half, with growth reported in underlying EBIT and NPAT.

“Sustained business optimisation gains with strong embedded pricing discipline delivered an increase in EBIT of 0.9 per cent from OPS North America, despite being impacted by ongoing softness in the broader North American manufacturing industry.

“And for its first month under the ownership of Orora, Saverglass performed in line with expectations during December 2023.”

Despite uncertain global consumer demands, Lowe says that the result from Australasia underscores the resilience of the beverage business, with earnings growth delivered by record can production and continued strong consumer demand for cans, which is expected to offset the ongoing soft demand for Australian commercial wine and beer bottles.

“Underlying EBIT increased by 2.2 per cent in Beverage Australasia, reflecting another robust performance from the team, with continued volume growth and improved product mix in cans volume partially offset by lower glass volumes,” he added.

As the Australian wine industry awaits a decision regarding the resumption of exports of Australian wine to China, with the review set to conclude in March, Lowe confirmed that the business still has the capacity to redeploy production back to export bottles.

Additionally, in 2023 Orora reported making progress towards its Our Promise to the Future sustainability goals, with Saverglass also operating in line with its sustainability targets. For the group’s Queensland and South Australian facilities, new solar and wind farm PPAs were secured for electricity consumption, while the Saverglass F5 furnace was recommissioned in December 2023 as a low-carbon hybrid furnace delivering up to 30 per cent electricity boost.

“Our results reflect the ongoing passion, resilience and focus of our team, delivering a commendable set of results in the current market environment, while also successfully completing the Saverglass acquisition,” added Lowe.

“As we enter the second half of FY24, we look forward to continuing to deliver on our strategy, transitioning Saverglass into the Orora Group and building momentum across the organisation. Orora retains a strong balance sheet and with robust cash generation, the company remains well positioned for ongoing organic investment.”

Looking to FY24 priorities, Lowe says Orora will continue to enhance its business model while expanding its product and service offerings, as well as custom packaging capabilities, including sustainability-related offerings.

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