Orora reports strong half-year financials amid Saverglass acquisition

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Australian packaging manufacturer Orora Limited has released its first-half financial results for the fiscal year ending 31 December 2023, highlighting the completion of its acquisition of Saverglass, a leading global glass business, as a notable milestone during this period.

Despite facing challenging economic conditions, the ASX-listed company demonstrated resilience and reported solid earnings performance, marked by growth in underlying earnings before interest and tax (EBIT) and net profit after tax (NPAT).

In particular, Orora achieved sales revenue of $2,139.1 million, representing a decrease of 5.5 per cent (7.3 per cent on a constant currency basis), the company said in a media release.

Excluding the contribution from Saverglass, revenue experienced a decline of 10.6 per cent.

Statutory NPAT amounted to $68.2 million, down $39.9 million primarily due to significant item expenses related to transaction costs for the Saverglass acquisition.

However, underlying NPAT showed resilience, increasing by 0.5 per cent to $108.6 million. Underlying EBIT surged by 11.0 per cent to $184.1 million, demonstrating Orora’s operational strength despite market challenges.

Orora’s North American segment showcased a 0.9 per cent increase in EBIT, attributed to sustained business optimisation efforts, while Australasia reported a robust EBIT growth of 2.2 per cent, driven by volume growth and improved product mix in beverage cans volumes.

The integration of Saverglass into Orora Group commenced smoothly, with Saverglass contributing revenue of €69.5 million and EBIT of €8.1 million during its first month under Orora ownership.

Brian Lowe, managing director and CEO of Orora, expressed satisfaction with the results, highlighting the successful completion of the Saverglass acquisition and the company’s ability to navigate through the current market conditions.

Lowe also praised the dedication and focus of Orora’s team in achieving commendable results while executing strategic initiatives.

“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,” he noted.

Looking ahead, Orora anticipates higher Group EBIT for FY24, excluding the contribution from Saverglass.

Despite ongoing uncertainties in global consumer demand, the company expects continued margin improvement in North America through profitability programs and cost management efforts.

In Australasia, strength in the cans segment is forecasted to counterbalance the softness in the glass segment.

Saverglass’s EBITDA for FY24 is projected to be in line with the pro forma LTM to June 2023, contingent upon market conditions.