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).


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