Total expenses jumped by 14% during period under review

Profits have jumped by 11 per cent at AMG Packaging & Paper but the company experienced a five per cent decline in revenues during the last three quarters.

Pre-tax profit during the for the nine months ended May 31, 2021 rose by 11 per cent to $48.12 million coming from $43.20 million for the comparable period in 2020. However, profit before tax for the May quarter totalled $24.19 million, which was an increased of 26 per cent relative to $19.16 million booked for the corresponding quarter of 2020.

The company incurred tax expense of $6.01 million for the period under review relative to $5.40 million for the corresponding period of 2020. As such net profit amounted to $42.11 million, representing an 11 per cent increase above the $37.80 million recorded for the corresponding period in the prior year.

Net profit for the May quarter amounted to $21.17 million versus $16.75 million booked for the comparable period in 2020, which was a 17 per cent increase.

Revenue out-turn was disappointing

Revenues were down five per cent to end the third quarter at $508.89 million compared to $533.51 million, which was booked 12 months prior. Revenue for the third quarter fell slightly by less than oner per cent to $170.49 million relative to $170.69 million reported the previous year.

Cost of Inventories decreased by nine per cent for the period to $267.87 million (2020: $294.73 million). In addition, direct expenses decreased 13 per cent to $91.05 million (2020: $104.40 million).

As a result, gross profit rose year-on-year for the nine months by 12 per cent, from $134.37 million in 2020 to $149.98 million in 2021. Gross profit for the third quarter improved from $46.17 million in 2020 to $57.42 million, a 24 per cent increase year over year.

Total expenses increased by 14 per cent for the period in review to $106.26 million, up from $93.37 million booked for the nine months ended May 2020. The increase was lined with a mere one per cent decline in administrative expenses to $64.94 million from $65.66 million in the same period last year.

Depreciation saw an increase of seven per cent to $18.38 million compared to $17.17 million for the comparable period in 2020. Directors Fees remained stable at $8.16 million and Disposal of fixed assets declined to a loss of $3.97 million from a gain of 30,001.

Containing financial expenses

Additionally, financial expenses declined by 10 per cent to $6.20 million from $6.91 million booked in 2020. Total expenses for the quarter increased 22 per cent to close at $34.44 million (2020: $28.37 million). Other income, for the nine months ended May 31, 2021, amounted to $4.41 million (2020: $2.21 million).

As such, total comprehensive income for the nine months ended May 2021 closed at $42.11 million relative to an income of $37.80 million in 2020. Earnings per share (EPS) for the nine months totaled $0.082 relative to an EPS of $0.074 booked twelve months prior.

Earnings per share for the quarter amounted to $0.041 compared to an ​EPS of $0.033 recorded in the prior comparable period. The company, as at May 31, 2021, recorded total assets of $811.90 million (2020: $831.83 million).

Notably, ‘Cash & Cash Equivalents’ as at May 31, 2021 amounted to $143.07 million (2020: $232.85 million). ‘Property, Plant and Equipment’ also contributed to the slight decrease amounting to $361.53 million (2020: $374.28 million). The overall decline in the asset base was tempered by ‘Construction work in Progress’ which totalled $56.67 million (2020: nil).