Orora has released its financial results for the year ending 30 June 2024, where it also announced that it will potentially divest its Packaging Solutions business unit.

The Orora Packaging Solutions business unit reported a loss of revenue by 10.8 per cent to US$1.954 billion (down 8.4 per cent to $2.981 billion on a reported basis), which it said was due to the flow-through impact of price deflation and lower volumes from continued softness in the broader North American manufacturing industry.

Orora said it is “currently in discussions” to potentially divest this business unit, adding that the potential outcome would be “a specialised, value-added beverage packaging business with a strengthened balance sheet, supporting future growth and shareholder returns”.

Commenting on the potential divestment of the Orora Packaging Solutions business unit, its managing director and CEO Brian Lowe said, “Since the de-merger of Orora in 2013, we have steadily transformed the portfolio of businesses within the Orora Group.

“These decisions have been consistent with the creation of sustainable shareholder value and the company’s long-held strategic ambition to focus on beverage containers, given our strong view about the attractive long-term growth profile of this segment. Saverglass has provided the final building block in this strategic journey such that this focus can be materially accelerated.

“Therefore, we are currently in discussions to potentially divest the OPS business. Substantial work remains to finalise this divestment, and this will only proceed if the value and terms align to our own internal view of OPS’ value. The creation of value for our shareholders remains a priority.”

Reported revenues

In the report, Orora said its Australasian revenue was down by 2.5 per cent, and that its “record” Cans production was offset by lower aluminium prices and Glass and Closures revenue from decreased volumes.

Overall though, the company delivered positive earnings and cash flow growth in FY24, following the acquisition of Saverglass which it said contributed seven months’ of earnings.

It reported a sales revenue of $4.697 billion, up 9.5 per cent from the same time last year (excluding Saverglass, sales revenue was $3.992 billion, down seven per cent).

Its underlying earnings before interest and tax (EBIT) was $404.0 million, up 26 per cent (excluding Saverglass, underlying EBIT was $323.4 million, up 0.9 per cent), and its underlying net profit after tax (NPAT) was $223.7 million, up 10.2 per cent.

Commenting on Orora’s full year results, Lowe said, “The past financial year was a transformative period for Orora, as we completed the acquisition of premium global glass business Saverglass, one of the most significant milestones in the company’s history.

“While economic headwinds persisted across a number of regions, Orora has reported EBIT of $404.0 million, up 26 per cent, which includes seven months of contribution from Saverglass, and was slightly ahead of our trading update issued in April.

“We continued to navigate market challenges including lower customer demand for commercial wine, craft beer and premium spirits, as well as some sustained higher costs across the supply chain. Despite these factors, our team has demonstrated tremendous determination throughout the year to deliver a resilient result.”

“The financial performance of Saverglass for the first seven months under Orora ownership was consistent with our trading update in April, in light of continued customer destocking. Saverglass is a quality business with a compelling value proposition.

“Encouragingly, industry commentary as well as our own inventory data indicates improvement in the destocking issue, with trends expected to normalise in early calendar year 2025. We enter the new financial year with a newly formed Global Glass business unit comprising Saverglass and our Gawler facility, and while the external environment remains challenging, we are well placed to capitalise on growth opportunities when market conditions improve.”

Within its Global Beverage business segment, revenue of $1.716 billion was up by 65.5 per cent due to its acquisition of Saverglass.