Orora sees double digit sales and profit uptick

Australian display graphics, packaging and beverage business Orora achieved a strong uptick in both sales and profits in the half year to December.

Sales revenue was up by 10.6 per cent, nudging $2bn at $1.988bn, while underlying net profit after tax (NPAT) before significant items was $102.7m, up 12.9 per cent on the prior corresponding period (pcp) or 13.6 per cent on a constant currency basis.

Orora’s display graphics operation Orora Visual, and its Orora Packaging Solutions business, are both based in the US. Oraro CEO Brian Lowe told Print21 that its strategic review of its OV business was comnplete, and that the company was keeping it. He also said there are currently no plans to enter new territories with display graphics.

It sold its Australian-based fibre packaging business three years ago for $1.7bn to Nippon Paper, which renamed it Opal. Its US revenue is four times its Australia sales amount.

Orora Visual’s top 20 US customers represent 60 per cent of its revenue base. Display graphics is a fragmented market in North America. The company said “initiatives are underway to improve both revenue and profits, following an “outstanding” six months".

Commenting on Orora’s half year results, managing director and CEO Brian Lowe said: “I am pleased to report that Orora delivered a strong result for the first half of the fiscal year 2022. Our performance reflects the unwavering focus of our team on executing our strategic priorities in the context of a global pandemic.

“The Group reported an increase in underlying net profit after tax and underlying EBIT on the prior corresponding period, demonstrating the continued strength of the Group’s diversified packaging assets and sustainable earnings.

“Our North American business produced another outstanding result in the first half, continuing to drive improvements in operating and financial performance, exercising pricing discipline in a higher inflation operating environment and delivering strong earnings growth in both the manufacturing and distribution OPS businesses.

“And we are pleased with the Australasian business which reported a solid result, having largely mitigated the impacts of lower wine Glass volumes as the impact of Chinese tariffs on Wine were cycled, with 100 per cent of this capacity now redeployed to new product categories. Cans demand remains strong, with solid volumes achieved across all categories.

“Underpinning our results is the ongoing commitment to the Group’s corporate strategy, with clear strategic priorities formulated for each business unit. A strong balance sheet and operating cash flow ensures Orora is well positioned for growth, and continues to provide operating and strategic flexibility as we move forward. Our team remains disciplined and focused on delivering against our strategies, and I look forward to continuing our positive momentum in FY22.”

The company said it made good progress on its sustainability goals aligned to the refreshed pillars of circular economy, climate change and community. Orora says it is well on track to achieve its 2025 goal of 60 per cent recycled content in the glass packaging it manufactures. The company is also well on track to achieving a 40 per cent reduction in greenhouse gas emissions for Scope 1 and 2 by 2035 through a range of initiatives.