Pact Group Holdings (ASX: PGH) has announced a net profit after tax (NPAT) of $88 million for the year ending 30 June 2021, down one per cent as compared to the $89 million reported in the prior corresponding period (pcp).

The company’s underlying NPAT was $94 million, up 28 per cent compared to $73 million in the pcp.

According to the company, its NPAT was fueled by “strong volume growth” in its packaging and sustainability segment, underpinned by the consolidation of its regional platform in Asia.

Pact Group managing director and CEO Sanjay Dayal said, “I am very pleased with the performance of the company in the period. Volumes in key segments improved, and we delivered solid growth in underlying earnings and margins.

“Cashflow increased and gearing reduced. These results demonstrate the great progress we are making in the delivery of strategy and our vision to lead the circular economy.

“In our packaging and sustainability segment we delivered strong volume growth in closures, underpinned by the consolidation of our regional platform in Asia. This is a particularly pleasing result given the continued challenges arising from COVID-19 in the region.”

Dayal added that in A/NZ, the company benefitted from stronger demand in the agricultural and industrial sectors.

“Volume was also supported by contract wins underpinned by our circular economy credentials and growing demand for sustainable packaging. Rising raw material input costs later in the period were very well managed and margins were improved,” he added.

The earnings momentum in its materials handling and pooling segment continued, with EBIT up 23 per cent.

However, normalised demand in the hygiene category in its contract manufacturing segment delivered lower earnings, cycling out COVID-19 related demand in the prior period.

Dayal also provided an update to the company’s strategy to lead the circular economy through reuse, recycling and packaging solutions.

“Operations in our Australian packaging business have stabilised, and margins are improving. We have developed detailed segment strategies which are guiding our investment decisions and will continue to drive growth in margins. We are targeting to return margins in our Australian packaging business to global industry standard by 2025,” he said.

“A national network of plastics recycling infrastructure is critical to an effective local circular economy, and Pact is leading the industry through investment in scaled solutions. We are collaborating with recognised industry participants to gain access to important waste streams needed for recycling, and to secure offtake of recycled products.

“We recently announced plans to construct two new plastics recycling facilities, which together will lift Australia’s recycling capability by 40,000 tonnes. These facilities will complement our new Albury plant, which will be commissioned by the end of this year, and several other projects that are under evaluation.

“To support our customers in their transition to recycled content solutions, we are investing in end-to-end organisational capability. Our manufacturing, technical and innovation expertise enables differentiation in the market and is driving top-line growth. Our circular economy credentials have already underpinned several new contracts in the packaging and infrastructure sectors.”