AMG reports 9% decline in nine months net profits

Date: July 12, 2019

AMG Packaging & Paper Company Limited (AMG) for the nine months ended May 31, 2019 reported a 9% increase in revenue to $587.61 million (2018: $538.75 million). Revenue for the quarter advanced 2% to close at $199.91 million relative to $195.09 million reported the previous year.

Cost of Inventories increased by 11% for the period to $353.41 million (2018: $319.12 million). In addition, direct expenses increased 12% to $108.80 million (2018: $97.56 million). As a result gross profit increased year-on-year for the nine month period by 3%, from $122.06 million in 2018 to $125.40 million in 2019. Gross profit for the third quarter improved from $39.70 million in 2018 to $43.89 million, a 11% increase year over year.

Total expenses increased by 2% for the period in review to $85.67 million for 2019, up from $ 84.39 million booked for the nine months ended May 2019. The increase was associated with a 1% growth in administrative expenses to $58.24 million from $57.77 million. Depreciation saw a 8% increase to $14.84 million compared to $13.71 million for the comparable period in 2018. Directors Fees saw a 2% decrease from $8.9 million to $8.73 million. Total expenses for the quarter increased 3% to close at $27.51 million (2018: $26.79 million).

Consequently, profit before tax for the period rose by 4% to $41.04 million (2018: $39.50 million). However, profit before tax for the quarter totalled $16.58 million, which increased by 28% relative to $12.98 million booked for the corresponding quarter of 2018.

The company incurred tax expense of $5.13 million for the nine months relative to nil for the corresponding period of 2018. Income from continuing operations amounted to $35.91 million, a 9% decrease below the $39.50 million recorded for the corresponding period in the prior year. Income from continuing operation for the quarter amounted to $14.36 million versus $12.98 million booked for the comparable period in 2018, a 11% increase.

AMG reported no net loss on discontinued operations for the nine months ended relative to $70.35 million for 2018. Net loss on discontinued operations for the quarter also amounted to nil relative to$34.40 million for 2018. As such, total comprehensive income for the nine months ended May 2019 closed at $35.91 million relative to a loss of $30.85 million in 2018.

Earnings per share (EPS) for the nine months totaled $0.07 relative to a loss per share of $0.06. Earnings per share for the quarter amounted to $0.03 compared to a loss per share of $0.04. The trailing EPS amounted to $0.08. The number of shares used in the calculation was 511,894,286 units. Notably, AMG’s stock price closed the trading period on July 12, 2019 at a price of $2.02.

Balance Sheet Highlights:

The company, as at May 31, 2019, recorded total assets of $767.68 million. Notably, ‘Property, Plant & Equipment’ as at May 31, 2019 amounted to $367 million, while ‘Inventories’ totalled $186.61 million. AMG highlighted, “The purchase of 12 Retirement Crescent has been completed. The Board has authorized management to seek funding for the development of 12 Retirement Crescent.” They are also awaiting approval for the architecture drawings of same from the KSAC in order to begin construction. Total Stockholders’ equity as at May 31, 2019, closed at $490.74 million (2018: $449.71 million); this resulted in a book value of $0.96 (2018: $0.88).

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