Orora shares down as Saverglass buyout dampens profit result
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The news: Packaging giant Orora has reported a sharp drop in first-half profit amid softening demand and higher costs related to its acquisition of French premium bottle maker Saverglass.
The numbers: Statutory profit for the six months to December fell 37% to $68.1 million, largely due to the acquisition-related transaction costs. Underlying profit rose just 0.5% TO $108.6 million. The company will pay an interim dividend of 5 cents a share, down from 8.5 cents a year ago.
Orora shares were down nearly 4% to $2.79 in early trading on the ASX.
The context: Orora’s half-year revenue slipped 5.5% to $2.1 billion due to softer demand in the company’s North American and Australasian markets. It said the results were set against the backdrop of a “challenging macro-economic environment” but said it still expected higher earnings for the full year.
The company acquired Saverglass for $2.26 billion with the aim of making it the centrepiece of its global glass business unit and to operate as a third platform for growth. It raised a combined $1.1 billion through a discounted institutional placement and rights entitlement offer to fund the buyout.
The source: ASX announcement
