Orora Ltd (ASX: ORA) has reported its half year result to 31 December 2018.
Orora is a global packaging business which provides a range of packaging solutions and displays. Its products include glass bottles, aluminium cans, closures & caps, recycled paper, point-of-purchase displays, boxes & cartons, rigid packaging, flexible packaging, bags and sacks. The company operates in seven countries with nearly 7,000 employees. It has 47 manufacturing plants and 23 distribution sites.
What Orora Reported
The packaging business reported that packaging revenue was up 9.9% to $2.3 billion and that EBIT increased by 5.9% to $175.1 million (click here to learn what EBIT means)
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Net profit after tax (NPAT) increased by 7.6% to $113.7 million and earnings per share (EPS) grew by 6.8% to 9.4 cents.
The company explained the result that the Australalsian Fibre Packaging and Beverage businesses demonstrated their “quality and resilience” benefiting from organic growth and innovation investments. However, there was a certain amount of input cost pressures in this period.
Both the North American Orora Packaging Solutions business and Orora Visual business had lower earnings (in constant currency terms) from margin and cost pressures in “tough market conditions.”
In this half-year Orora has been busy finalising acquisitions, referring to Bronco and Pollock. These acquisitions aim to expand Orora’s exposure to the large and growing Texas market, as well as add scale benefits.
Orora Dividend And Balance Sheet
Orora has declared an interim dividend of 6.5 cents, which represents an increase of 8.3% compared to the payment made a year ago.
In regards to the balance sheet, net debt increased to $872 million, which increased from $667 million at June 2018, due to the acquisitions made.
Orora Management Comments
Orora CEO Nigel Garrard said:
“Orora’s strong cash flow capability, combined with the strength of its balance sheet, continues to provide Orora with capacity and flexibility to invest with discipline in innovation as well as organic and new growth opportunities that deliver sustainable value creation for shareholders.
Is Orora A Buy?
Orora was expected to deliver profit of $113 million, so with that extra $0.7 million of net profit it beat expectations.
I don’t know if Orora is a buy, but it seems like a decently defensive business with potential to grow in several countries. The dividend yield of 4% looks fairly attractive for income.
However I prefer the look of some of the proven shares in the free report below.
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