Profit surges 156% at AMG Packaging

Profit at AMG Packaging surged 156 percent in the February quarter, to $18 million after tax from $7 million in 2021, even after suffering a loss on foreign exchange of $4 million versus a $4 million gain in the prior period. For the six months to February, profit jumped 150 percent to $53 million from $21 million in 2021.
The increase in profit follows moderate growth for 2021 over the previous year when the company posted $61 million after tax compared to $56 million in 2020.
Sale revenues rose 32 percent for the quarter, to $217 million from $165 million in 2021 and jumped 44 percent for the six months, to $487 million from $338 million in 2021.
The cost for inventories used in production increased slightly less than growth in revenues, with a rise of 30.5 percent in the latest quarter to $117 million compared to 2021, million ut cots rose faster than six months sales, after increasing 48.5 percent for the half year to $273 million. Direct costs rose well below the increase in revenues for both the quarter and six months, up just 10 percent to $38.7 million and 27 percent to $79 million for the six months.
Gross profit margin in the February quarter remained at 28 percent, similar to the 2021 half year and rose to 28.3 percent in the latest quarter from 24 percent for the 2021 quarter. Operating profit rose just 52.5 percent in the quarter to $61 million from $40 million and spiked 41 percent for the year to date, to $135 million from $93 million in 2021.
Administrative expenses rose 6 percent to $24 million in the quarter and 7 percent in the six months to $46 million. Depreciation increased to $7.6 million in the quarter from $6 in 2021 and $13.7 million for the six months from $12.3 million in 2021. The increased charge in the second quarter results from the addition to the factory and equipment for box production. The company will enjoy reduced production costs due to the new equipment that will replace an older machine. Finance costs declined in the quarter to $1.7 million, from $2 million in 2021 and $4.2 million to $3.6 million for the six months.
Taxation on profit moved from $919,135 in the February 2021 second quarter to $3.2 million in 2022 and for the half year, it jumped from $3 million to $13.5 million.

New addition to the AMG factory

Gross cash flow brought in $85 million. Increased working capital saw the amount falling to $52 million. Funds were reduced to $12 million after adding $26 million in fixed assets and loan payment of $10 million, thus pushing cash and equivalent on hand of $131 million at the start of the year, falling to $143 million at the end of February.
At the end of February, shareholders’ equity stood at $661 million, with long term borrowings at $99 million and short term at $13.5 million. Current assets ended the period at $509 million, including Inventories of $207 million, trade and other receivables of $150 million, and cash and bank balances of $143 million. Current liabilities ended the period at $188 million and resulted in net current assets ending at $321 million.
Earnings per share came out at 3 cents for the quarter and 10 cents for the year to date. IC Insider.com forecasts 35 cents per share for the fiscal year ending August 2022 and a 60 cents per share projection for 2023. The PE stands at 11 times the current year’s earnings and 6 times 2023 earnings based on the price of $3.70, the stock last traded on the Jamaica Stock Exchange Junior Market.

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