Pact Group (ASX:PGH) has reported a loss in revenue for its FY24 financials, announcing a revenue of $1.857 billion, which was $91 million below the prior year.

According to the company, this primarily reflected the loss of revenue from the Crates business, combined with some volume decline in Australia, New Zealand and China.

However, Pact’s underlying EBIT of $154.6 million was above the prior year and reflected savings from the Transformation Program combined with margin growth in the Materials Handling & Pooling, and in Contract Manufacturing segments on the back of efficiency gains.

Its underlying Net Profit After Tax (NPAT) was $44.9 million, slightly ahead of the prior year. The reported NPAT was $74.9 million as a result of adding $30 million of after tax underlying adjustments which included the gain on sale of the Crates business.

The full year results contain five months of trading from the Crates business when it was wholly owned, and seven months of 50 per cent of the NPAT from the newly formed joint venture. Pact divested 50 per cent of its Crates business in December 2023, while retaining the remaining 50 per cent to form a joint venture in partnership with global infrastructure investment manager, Morrison & Co.

Pact Group CEO and managing director Sanjay Dayal said market conditions were challenging across the year as the business felt the impact of cost-of-living pressures in Australia and New Zealand, and subdued demand out of China.

“Despite these challenging conditions, we reported a growth in earnings. This was achieved on the back of a more stable and predictable supply chain, a proactive cost reduction program – you will recall that I outlined the Transformation Program at our AGM last year – and significant efficiency gains across the business,” he said.

“I am pleased to report that Gearing was 2.5 times, down from three times in the prior corresponding period, and reflects the repayment of debt with the proceeds from the Crates business transaction, as well as strong working capital management.

“In FY24, we continued to invest in safety: through the use of ‘leading’ indicators to monitor performance; establishing a new ‘One Pact’ Safety Council to oversee the Group’s workplace, health, safety and environment function; and shifting our focus from managing the result of incidents to managing our exposure to risk.”

In addition, Pact Group chair Raphael Geminder revealed more information around the divestment of its non-core businesses, saying it has now reached an agreement to sell its Viscount roto-moulding business (VRM) in Carrum Downs, Victoria.

“VRM manufactures plastic infrastructure products such as underground pits and lids for telecommunications, electrical, road and rail applications, as well as water tanks, and other custom-made products,” he said.

“Under the agreement, the VRM business will be acquired by CRH, a building materials solutions company. Completion of the VRM transaction is expected later this year subject to the satisfaction of customary conditions and approvals.”

In addition, he mentioned that the unconditional off-market takeover offer for all of the ordinary shares in Pact announced on 13 September 2023 closed on 7 June 2024, with Kin Group and associates increasing their share ownership in Pact to 88.04 per cent.

“While I believe the future success of Pact is best achieved under private ownership, I would like to reiterate that I continue to have every confidence in Pact Group, its employees, its business and its long-term future,” he added.