AMG reports a 10% decline in the first quarter net profits

January 14, 2020

AMG Packaging Paper Company Limited (AMG), for the three months ended November 30, 2019,  recorded Turnover in the amount of $191.60 million, a decline of 10% when compared to $213.92 million booked the previous year’s corresponding quarter.

Cost of Inventories totalled $108.80 million, a decrease of 16% relative to $130.18 million booked in the prior year’s corresponding quarter. Direct Expenses declined year over year by 7% to $33.55 million (2018: $36.08 million). Thus, Total Manufacturing Costs for the first quarter amounted to $142.35 million, 14% less than the $166.26 million reported for the first quarter of 2018. As such, Gross Profit amounted to $49.25 million (2018: $47.66 million).

Administrative Expenses grew by 14% to close at $22.97 million (2018: $20.11 million), while Depreciation fell 1% to $4.91 million (2018: $4.96 million). Finance Expense for the period rose to $2.35 million, 72% higher than the $1.37 million booked for the first quarter of 2018. Directors Fees for the period amounted to $2.72 million (2018: $3.37 million).

Other income closed the period under review at $249,763 (2018: $497,498).

As such, pre-tax profit closed at $16.55 million, 10% lower than the $18.35 million reported for the first three months ended November 30, 2018. Following tax charges of $2.07 million (2018: $2.30 million), Net profit amounted to $14.48 million, a 10% decline relative to net profit of $16.05 million reported in the first quarter of 2018.

Earnings per share for the period amounted to $0.028 (2018: $0.031). The twelve month trailing EPS amounted to $0.11. The number of shares used in our calculations amounted to 511,894,285 units. Notably, AMG’s stock price closed the trading period on January 13, 2020 at a price of $2.20.

The Company noted, “the KSAC has approved the purposed construction for 12 Retirement Crescent in this quarter. The board has identified a contractor and has agreed for them to complete the factory on 12 Retirement Crescent.”

Furthermore, the AMG stated that, “ the Company is still in the investigation for new equipment that will assist with production speeds and efficiency.”

Balance Sheet Highlights:

As at November 30, 2019, Total Assets amounted to $727.06 million, 6% more than the $687.62 million a year ago. This was due to a 165% climb in the company’s Cash & Cash Equivalents which closed the period at $135.23 million (2018: $50.97 million). Also, ‘Property, Plant and Equipment’ contributed to the growth closing at $362.45 million (2018: $323.76 million). However, this was offset by the decrease in AMG’s Inventories to total $122.04 million (2018: $193.83 million).

Shareholder’s Equity as at November 30, 2019 totaled $517.23 million (2018: $459.66 million) resulting in a book value per share of approximately $1.01 (2018: $0.90).

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