Orora’s Australasia EBIT down 3.5%; US sees strong earnings growth

Orora has released its financial results for the half year ending 31 December 2022, reporting a reduced EBIT of 3.5 per cent for the Australasia region, while its North America division saw “strong earnings growth” of an EBIT up 20.2 per cent.

The company’s total sales revenue for the first half was $2.264 billion, up 13.9 per cent from the same time last year. Its NPAT was $108.1 million, up 7.8 per cent.

Orora CEO and managing director Brian Lowe said the results for the first half of fiscal year 2023 demonstrate the resilience of the business, as well as a steadfast commitment to delivering against its strategic priorities.

“The external environment continues to present challenges including rising inflationary pressures and supply chain complexities. Despite this, Orora has delivered a solid result in line with expectations,” he said.

“The group reported an increase in EBIT and net profit after tax, driven by strong earnings growth in North America and another robust earnings performance in Australasia.  

“Our North America business performed strongly, delivering an increase in revenue and double-digit earnings growth, driven by performance in distribution, as the business retains its focus on driving cost-to-serve efficiencies as well as business optimisation, pricing discipline and customer account profitability.  

“Our Australasian business continues to deliver reliable and resilient earnings. An increase in revenue was supported by Cans volume growth, and the pass-through impact of higher aluminium costs. Earnings were as expected, slightly down for the first half of FY23, largely reflecting the timing of inflationary impacts and lower wine and beer glass volumes. 

“Commendably, the Orora team has deftly navigated challenging market conditions to deliver a solid half-year financial performance. Orora’s balance sheet and operating cash flow remain strong, positioning the Group firmly for future investment and growth.”   

Orora also provided an update on its sustainability initiatives, saying it continues to make good progress and is on track to achieve its sustainability goals aligned to the pillars of circular economy, climate change and community.

“Significant steps have been made towards our 60 per cent recycled content target in manufactured glass products. The group’s new Cullet Beneficiation Plant at Gawler, South Australia, is now fully operational. This plant is helping to drive the average recycled content in our manufactured glass containers above the 38 per cent achieved in FY22,” the company said.

“Under the Climate Change pillar, Orora is on track to achieve a 40 per cent reduction in greenhouse gas emissions for Scope 1 and 2 by 2035.

“Orora signed a contract in December to construct an oxygen plant to upgrade the G3 glass furnace at Gawler to oxyfuel technology in 2024. This investment will enable a ~20 per cent reduction in G3 glass furnace CO2 emissions and will move the G3 glass furnace into the top 10 per cent of energy efficient furnaces worldwide.”

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