AMG reports 5% increase in nine months net profits

July 15, 2020

AMG Packaging & Paper Company Limited (AMG) for the nine months ended May 31, 2020 reported a 9% decrease in revenue to $533.51 million (2019: $587.61 million). Revenue for the quarter fell 15% to close at $170.69 million relative to $199.92 million reported the previous year.

Cost of Inventories decreased by 17% for the period to $294.72 million (2019: $353.39 million). In addition, direct expenses decreased 4% to $104.40 million (2019: $108.87 million). As a result, gross profit rose year-on-year for the nine months by 7%, from $125.35 million in 2019 to $134.38 million in 2020. Gross profit for the third quarter improved from $43.82 million in 2019 to $46.13 million, a 5% increase year over year.

Total expenses increased by 9% for the period in review to $93.39 million for 2020, up from $85.65 million booked for the nine months ended May 2019. The increase was lined with a 10% growth in administrative expenses to $65.61 million from $59.40 million in the same period last year. Depreciation saw an increase of 16% to $17.17 million compared to $14.84 million for the comparable period in 2019. Directors Fees saw a 7% decrease from $8.73 million in 2019 to $8.16 million. Total expenses for the quarter increased 3% to close at $28.35 million (2019: $27.51 million).

Other income, for the nine months ended May 31, 2020, amounted to $2.24 million (2019: $1.32 million)

Consequently, profit before tax for the period rose by 5% to $43.23 million (2019: $41.02 million). However, profit before tax for the quarter totalled $19.15 million, which increased by 16% relative to $16.52 million booked for the corresponding quarter of 2019.

The Company incurred tax expense of $5.40 million for the nine months relative to $5.13 million for the corresponding period of 2019. Net profit amounted to $37.83 million, a 5% increase above the $35.89 million recorded for the corresponding period in the prior year. Net profit for the quarter amounted to $16.74 million versus $14.29 million booked for the comparable period in 2019, a 17% increase.

As such, total comprehensive income for the nine months ended May 2020 closed at $37.83 million relative to an income of $35.89 million in 2019.

Earnings per share (EPS) for the nine months totaled $0.074 relative to an EPS of $0.07. Earnings per share for the quarter amounted to $0.033 compared to an ​EPS of $0.03. 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 14, 2020 at a price of $1.52.

Balance Sheet Highlights:

The Company, as at May 31, 2020, recorded total assets of $831.96 million (2019: $767.67 million). Notably, ‘Cash & Cash Equivalents’ as at May 31, 2020 amounted to $232.85 million (2019: $74.91 million). ‘Property, Plant and Equipment’ also contributed to the increase amounting to $374.28 million (2019: $367 million). The overall growth in the asset base was tempered by a 31% decrease in ‘Inventories’ totalled $127.73 million (2019: $186.30 million) and a 29% decrease in ‘Accounts Receivables Net Allowances’ which closed at $97.09 million (2019:$137.68 million).

Total Stockholders’ equity as at May 31, 2020, closed at $530.34 million (2019: $490.74 million); this resulted in a book value of $1.04 (2019: $0.96).

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