Amcor profit drops 64pc after hit from Venezuela business

Packaging company Amcor’s full-year profit has sunk 64pc following an impairment linked to its Venezuelan business.

An Amcor employee looks down an aisle of stacked aluminium beverage cans ready for distribution. Picture: Carla Gottgens/Bloomberg News.

Packaging company Amcor has taken a hit from a pre-announced impairment linked to an accounting change for its Venezuelan business.

Profit dropped 64.1 per cent to $US244.1 million in the year to June 30, compared with $680.3m in the previous year.

Excluding significant items, profit was steady at $US671.1m.

The company (AMC) booked a one-time charge of $US348.9m after tax linked to its operations in Venezuela, calling the economic and political environment “volatile, challenging and deteriorating”.

New government regulations of the exchange rate have increased restrictions on foreign currency conversion and result in a lack of exchangeability between the Venezuelan bolivar and US dollar, Amcor said.

Amcor said this has restricted its ability to import raw materials and spare parts and pay for them in US dollars.

The group believes it has effectively eliminated its financial exposure linked to Venezuela, but said it remains committed to its operations there. The residual investment value in its accounts for its Venezuela operations is nil as at June 30.

Separately, Amcor took another hit from the exchange rate, as translating non-US dollar earnings into US dollars for reporting purposes resulted in a $US51m negative impact on profit.

Revenue edged down 2 per cent to $US9.42 billion in the year, from $9.61bn in the prior year.

Amcor will pay a final dividend of US22c, unfranked, to shareholders who are on the register on September 7.