AMG reports 55% increase in year end net profits

Date: December 4, 2019

AMG Packaging and Paper Company Limited (AMG) for the year ended August 31, 2019 recorded turnover in the amount of $762.30 million (2018: $718.92 million), an increase of 6% when compared to 2018.

Total cost of sales amounted to $606.29 million, an increase of 7% relative to the corresponding period in 2018 of $567.93 million. Consequently, gross profit amounted to $156.01 million, 3% up from $150.98 million reported for the prior year.

The company booked reversal of bad debt in the amount of $12.19 million relative to nil the prior year. AMG also booked a gain on foreign exchange of $2.66 million relative to a loss of $4.81 million in 2018.

Other income for the period totalled $1.90 million relative to $1.34 million in 2018, a 42% increase year on year.

Administrative expenses rose by 5% to close at $94.29 million versus $89.59 million reported in 2018. Selling and Distribution Expense totalled $8.97 million (2018: $7.88 million). Finance costs fell year over year by 6% to a total of $5.27 million (2018: $5.60 million).

As such, profit before tax closed at $64.23 million for 2019, 45% more than the $44.44 million booked last year. Taxes of $5.09 million was reported for the financial year compared to a tax charge of $6.23 million in 2018. Net Profit amounted to $59.14 million compared to $38.21 million in 2018, a 55% increase.

The Company incurred a loss from discontinued operations of $70.35 million for 2018 (2019: Nil). Total comprehensive income for year closed at $59.14 million relative to a loss of $29.85 million in 2018.

Earnings per share (EPS) for the year amounted to $0.116 versus an EPS of $0.07 for 2019. The number of shares used in our calculations amounted to 511,894,285 units. AMG closed the trading period on December 4, 2019 at $2.06.

Management has indicated, “the Company has obtained funding from Proven Wealth Limited to assist with the development of 12 Retirement Crescent. The KSAC is in the process of reviewing the architectural drawings for 12 Retirement Crescent.” Additionally, “the Company has begun the investigation on new equipment that will assist with production speeds and efficiency. AMG has joined the AICC, The Independent Packaging Association to help with this investigation and future projects.”

Balance Sheet Highlights:

As at August 31, 2019, total assets amounted to $712.32 million, compared to its value of $747.01 million a year ago, a 5% decline year on year.  This decrease was attributed to a decline in inventories which amounted to $179.01 million relative to $259.80 million in 2018. The downward movement was tempered by an increase in ‘Cash & Cash Equivalents’ which totalled $90.47 million (2018: $46.67 million).

Shareholder’s Equity as at August 31, 2019 totalled $502.75 million (2018: $454.83 million) resulting in a book value per share of approximately $0.98 (2018: $0.89).

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