AMG reports $29.85 million total comprehensive loss for the year

Date: November 2, 2018

AMG Packaging and Paper Company Limited (AMG) for the year ended August 31, 2018 recorded turnover in the amount of $718.92 million (2017: $660.25 million), an increase of 9% when compared to 2017. For the quarter turnover was down 4% to close at $179.89 million (2017: $187.88 million).

Total cost of sales amounted to $567.93 million, an increase of 12% relative to the corresponding period in 2017 of $506.26 million. Contributing to the increase in cost of sales was cost of materials used which rose $69.42 million year over year to $419.35 million (2017: $349.93 million). AMG noted, “Management has taken steps to pass on some of the increases from raw material costs.”

Consequently, gross profit amounted to $150.98 million, 2% down from $154 million reported for the prior year. For the fourth quarter gross profit closed the period at $29.22 million relative to $7.83 million in 2017. Other income for the year amounted to $1.34 million compared to $4.56 million booked in 2017. AMG recorded a loss on gain of foreign exchange of $4.81 million compared to a gain of $2.66 million documented in 2017.

Administrative expenses grew by 2% to close at $89.59 million versus $87.64 million reported in 2017. Financial costs fell year over year by 55% to a total of $5.60 million (2017: $12.36 million). Selling and distribution expenses recorded a 22% drop from $10.12 million booked in 2017 to $7.88 million for year ended August 31, 2018.

As such, Pre-tax profit closed at $44.44 million for 2018, 13% less than the $51.10 million booked last year, after which taxes of $6.23 million (2017: $14.48 million) were charged .

Net profit from continuing operations after taxes amounted to $38.21 million, a jump of 5% relative to net profit of $36.62 million in 2017. Loss from discontinued operation amounted to $70.35 million relative to nil in 2017. Deferred tax benefit totalled $8.79 million, resulting in total net loss from discontinuing operations of $61.56 million.

Total net operating loss for 2018 amounted to $23.35 million versus an income of $36.62 million twelve months earlier.

Earnings per share (EPS) for the year amounted to $0.07 (2017: $0.07), while the loss per share for the quarter was $0.002 (2017: LPS: $0.06). The number of shares used in our calculations amounted to 511,894,285 units. AMG last traded on November 1, 20018 at $1.95.

AMG noted, “despite a 8% increase in revenues, gains were eroded by dramatic increases in paper prices throughout the year. Paper prices increased 30% to 40% throughout the period. The devaluation of the Jamaican dollar also had a negative effect on the company’s overall results.”

Balance Sheet Highlights:

As at August 31, 2018, total assets amounted to $747.01 million, by 8% compared to its value of $688.94 million a year ago. This increase was due to the increase in ‘Inventories’ which totaled $259.80 million (2017: $171.96 million). However, this was tempered by the decline in the company’s ‘Property, Plant & Equipment’ which closed the year at $328.66 million (2017: $388.87 million).

Shareholder’s Equity as at August 31, 2018 totalled $454.83 million (2017: $484.68 million) resulting in a book value per share of approximately $0.89 (2017: $0.95).

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.

 

2018-11-02T18:30:52+00:00