Business
JM | Oct 22, 2021

AMG records 11% increase in nine-month net profit

/ Our Today

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AMG Packaging and Paper Company’s exhibition booth at the 2016 staging of Expo Jamaica. (Photo: Facebook @AMGPackaging)

Jamaican listed company, AMG Packaging and Paper Company Limited saw an 11 per cent jump in its net profit for the nine-month period ended August 31, indicative of the efficient management of the current pandemic period.

Profit before tax closed at $69.09 million for 2021, representing a 13 per cent increase over the $61.40 million booked last year. Profit before tax for the August quarter climbed by 13 per cent, moving from $18.41 million in 2020 to $20.04 million.

Taxes of $6.47 million was reported compared to a tax charge of $5.18 million in 2020. Net Profit amounted to $62.63 million compared to $56.21 million in 2020, an 11 per cent improvement year-over-year.

Slight decline in turnover

However, the company recorded a slight drop in turnover, which amounted to $705.91 million for the nine-month review period coming from $720.45 million in 2020, a two per cent decline. Turnover for the quarter rose by five per cent, moving from $186.95 million in 2020 to $197.02 million for the period under review.

Total manufacturing costs amounted to $500.60 million, which represents a seven per cent decrease in comparison to the $538 million booked in the previous period. Consequently, gross profit amounted to $205.32 million, 13 per cent up from $182.45 million reported the prior year.

AMG booked a loss on foreign exchange of $3.96 million relative to a gain of $5.65 million in 2020. Other income for the period totalled $6.56 million relative to $4.07 million in 2020, a 61 per cent increase year on year.

Administrative expenses rose by six per cent to close at $92.34 million versus $87.40 million reported in 2020. Directors’ fees totalled $11.84 million (2020: $10.88 million).

Finance costs declined year over year by nine per cent to a total of $8.20 million (2020: $9.06 million). Conversely, Depreciation increased and close at $24.31 million (2020: $23.43 million).

COVID-19 challenges

In commenting on the financial performance, the management reports that, “there were numerous challenges we faced throughout the year. The Covid-19 pandemic continues to affect our operations particularly the lockdown days and the curfew hours.

In addition, the dramatic increase in freight cost, as well as the shortage of paper on the world market, continues to drive up the cost of paper. AMG’s management team says it is continuing to monitor what is happening on the world and local markets.

As at August 31, 2021, total assets amounted to $906.13 million, compared to its value of $821.31 million a year ago, a 10 per cent increase year on year. This increase was attributed to a 106 per cent climb in ‘Inventories’ which amounted to $221 million relative to $107.43 million in 2020.

The upward movement was tempered by a 50 per cent decrease in ‘Cash & Cash Equivalent’ which totalled $130.57 million (2020: $259.29 million). Shareholder’s Equity as at August 31, 2021 totalled $609.98 million (2020: $548.73 million) resulting in a book value per share of $1.19 (2020: $1.11).  

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