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).

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