AMG reports 11% increase in nine months net profit

July 16, 2021

AMG Packaging & Paper Company Limited (AMG) for the nine months ended May 31, 2021 reported a 5% decrease in revenue to $508.89 million (2020: $533.51 million). Revenue for the quarter fell slightly by less than 1% to $170.49 million relative to $170.69 million reported the previous year.

Cost of Inventories decreased by 9% for the period to $267.87 million (2020: $294.73 million). In addition, direct expenses decreased 13% to $91.05 million (2020: $104.40 million). As a result, gross profit rose year-on-year for the nine months by 12%, from $134.37 million in 2020 to $149.98 million in 2021. Gross profit for the third quarter improved from $46.17 million in 2020 to $57.42 million, a 24% increase year over year.

Total expenses increased by 14% for the period in review to $106.26 million, up from $93.37 million booked for the nine months ended May 2020. The increase was lined with a mere 1% decline in administrative expenses to $64.94 million from $65.66 million in the same period last year. Depreciation saw an increase of 7% to $18.38 million compared to $17.17 million for the comparable period in 2020. Directors Fees remained stable at $8.16 million and Disposal of fixed assets declined to a loss of $3.97 million from a gain of 30,001. Additionally, financial expenses declined by 10% to $6.20 million from $6.91 million booked in 2020. Total expenses for the quarter increased 22% to close at $34.44 million (2020: $28.37 million).

Other income, for the nine months ended May 31, 2021, amounted to $4.41 million (2020: $2.21 million).

Consequently, profit before tax for the period rose by 11% to $48.12 million (2020: $43.20 million). However, profit before tax for the quarter totalled $24.19 million, which increased by 26% relative to $19.16 million booked for the corresponding quarter of 2020.

The Company incurred tax expense of $6.01 million for the nine months relative to $5.40 million for the corresponding period of 2020. Net profit amounted to $42.11 million, a 11% increase above the $37.80 million recorded for the corresponding period in the prior year. Net profit for the quarter amounted to $21.17 million versus $16.75 million booked for the comparable period in 2020, a 17% increase.

As such, total comprehensive income for the nine months ended May 2021 closed at $42.11 million relative to an income of $37.80 million in 2020.

Earnings per share (EPS) for the nine months totaled $0.082 relative to an EPS of $0.074 booked twelve months prior. Earnings per share for the quarter amounted to $0.041 compared to an ​EPS of $0.033 recorded in the prior comparable period. The trailing EPS amounted to $0.12. The number of shares used in the calculation was 511,894,286 units. Notably, AMG’s stock price closed the trading period on July 15, 2021 at a price of $1.52 with a corresponding P/E of 12.94 times.

Balance Sheet Highlights:

The Company, as at May 31, 2021, recorded total assets of $811.90 million (2020: $831.83 million). Notably, ‘Cash & Cash Equivalents’ as at May 31, 2021 amounted to $143.07 million (2020: $232.85 million). ‘Property, Plant and Equipment’ also contributed to the slight decrease amounting to $361.53 million (2020: $374.28 million). The overall decline in the asset base was tempered by ‘Construction work in Progress’ which totalled $56.67 million (2020: nil).

Total Stockholders’ equity as at May 31, 2021, closed at $590.84 million (2020: $530.31 million); this resulted in a book value of $1.15 (2020: $1.04).

Disclaimer: 

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.

2021-07-16T08:59:06-05:00