AMG reports 5% decrease in year end net profits

November 30, 2020

Audited Financial Statements Year Ended August 31, 2020:

AMG Packaging and Paper Company Limited (AMG) for the year ended August 31, 2020 recorded turnover in the amount of $720.45 million (2019: $762.30 million), a 5% decrease when compared to 2019. Turnover for the quarter increased by 7%, moving from $174.68 million in 2019 to $186.95 million for the period under review.

Cost of sales amounted to $530.95 million, which represents a 9% decrease in comparison to the $586.53 million booked in the previous. Consequently, gross profit amounted to $189.50 million, 8% up from $175.77 million reported the prior year.

Other income for the period totalled $9.71 million relative to $4.57 million in 2019.

Administrative expenses rose by 1% to close at $95.04 million versus $94.29 million reported in 2019. Finance costs increase year over year by 72% to a total of $9.07 million (2019: $5.27 million). In addition, Depreciation closed at $23.43 million (2019: $19.76 million). Impairment loss closed at $2.01 million versus gains on impairment of $12.19 million in 2019.

As such, profit before tax closed at $60.75 million for 2020, 6% less than the $64.94 million booked last year. Profit before tax for the quarter increased by 57%, moving from $10.43 million in 2019 to $16.36 million. Taxes of $5.18 million was reported compared to a tax charge of $5.09 million in 2019. Net Profit amounted to $56.21 million compared to $59.14 million in 2019, a 5% decrease. Net profit for the quarter totalled $18.22 million (2019: $23.25 million).

Earnings per share (EPS) for the year amounted to $0.11 versus an EPS of $0.12 for 2019. For the quarter, EPS closed at $0.04 (2019: $0.05). The number of shares used in our calculations amounted to 511,894,285 units. AMG closed the trading period on November 27, 2020 at $1.55 with a corresponding P/E ratio of 14.11 times.

Management has indicated, “For the 2020 year end we have seen sales falling in comparison to the previous year. The downturn is mainly because of the slowdown in the economy due to the COVID-19 Pandemic. We were able to improve drastically on our manufacturing costs, which helped to increase our bottom line.”

Balance Sheet Highlights:

As at August 31, 2020, total assets amounted to $821.28 million, compared to its value of $712.32 million a year ago, a 15% increase year on year. This increase was attributed to a 187% climb in ‘Cash & Cash Equivalents’ which amounted to $259.29 million relative to $90.47 million in 2019. The upward movement was tempered by a 40% decrease in ‘Inventories’ which totalled $107.43 million (2019: $179.01 million).

Shareholder’s Equity as at August 31, 2020 totalled $548.72 million (2019: $502.75 million) resulting in a book value per share of $1.07 (2019: $0.98).


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