Orora’s US operations shine as profit jumps almost 20 per cent

Bottle and packaging manufacturer Orora has shrugged off supply chain and inflationary pressures to post a solid jump in profits.

Glass bottle production at Orora Group’s manufacturing facility in South Australia.

Orora has posted a jump in underlying profit of almost 20 per cent, with its North American operations handing in an “impressive improvement’’ in financial and operating performance.

The packaging solutions provider, which makes glass bottles and aluminium cans for major beverage companies, posted revenues of $4.09bn, up 15.6 per cent, while underlying net profit was up $187.1m, or 19.4 per cent.

The company is rewarding shareholders with a 13.3 per cent increase in the final dividend to 8.5c, and managing director Brian Lowe said the company was set up for another solid year.

The group’s US operations delivered a 14.3 per cent uplift in revenues to $US2.3bn ($3.3bn), and earnings surged 32.6 per cent to $US97.9m. Australian operations grew revenues 9 per cent to $909.1m, while earnings were flat, up 0.2 per cent at $150.6m.

Mr Lowe said the business faced challenges common to other manufacturers such as supply chain issues and cost pressures, but had navigated them well.

“Our North American business again delivered an impressive improvement in both financial and operating performance, with an increase in revenue and earnings largely driven by an ongoing focus on business optimisation, customer account profitability and a relentless focus on managing inflationary inputs and cost to serve,’’ Mr Lowe said.

“Our Australasian business performed solidly – the team has done a commendable job of managing inflationary cost pressures and supply chain disruptions to deliver revenue growth and earnings that demonstrate the resilience of the beverage business.”

Mr Lowe said the company had a strong balance sheet and was “making significant investments’’ which would continue to grow the business. On the outlook for this financial year, the company expects earnings growth “reflecting the resilience of the business in what is expected to be a challenging year of economic conditions’’.

“In Australasia, EBIT is expected to be broadly in line with FY22, with the first half impacted by inflationary cost increases ahead of further second half customer price recovery,” it said. “In North America, further EBIT growth is expected reflecting the full year impact of FY22 price increases and continued implementation of profit improvement programs.’’

UBS told clients it was a solid result, with the broker having a 12-month target of $3.80 on the stock.

Orora shares closed 0.9 per cent, or 3c, lower at $3.50.

Originally published as Orora’s US operations shine as profit jumps almost 20 per cent