Sustainable packaging company Orora (ASX: ORA) has announced its financial results for the year ending 30 June 2021, reporting strong improvement in its full year results as a result of stronger volumes across cans and closures in Australasia.
It reported an underlying net profit after tax (NPAT) before significant items of $156.7 million, up 23.7 per cent on the prior year. Its sales revenue was $3.53 billion, down 0.8 per cent on FY20.
Its underlying earnings before interest and tax (EBIT) was $249.1 million, up 11.6 per cent, while its operating cash flow was $246.0 million, $76.2 million above the prior year.
Its Australasia sales revenue increased 6.1 per cent to $834.1 million, reflected by strong demand for cans and closures. Australasia EBIT was $150.3 million, a growth of 2.5 per cent driven by strong growth in cans volumes across all categories, offset by the impact from tariffs on Australian wine exports to China.
Its North American EBIT increased by 28.8 per cent to $98.8 million.
Orora managing director and CEO Brian Lowe said, “Our strategy is delivering, with focused execution improving our operations, stabilising our North American businesses and returning them to growth.
“We are also well positioned to pursue new growth opportunities as they emerge, both within our market-leading Australasian Beverage business as well as in North America.
“A strong balance sheet and cash flow provides the company with flexibility. We head into FY22 with positive momentum and the ability to invest where it will deliver the greatest long-term value.”
In February, Orora announced a positive set of half year results ending 31 December 2020, reporting an underlying net profit after tax (before significant items) of $91.1 million, up 18.9 per cent on the prior corresponding period.
However, in August last year, it reported an underlying net profit after tax (NPAT) of $127.7 million, down 22.8 per cent from the previous corresponding period due to the effects of COVID-19 for its full-year financial earnings for 2020.
Orora has also announced that it has committed to achieving net zero Scope 1 and 2 greenhouse gas emissions across its operations by 2050, with a well-defined plan to achieve a 40 per cent reduction in these emissions by 2035.
It said the pathway between 2035 and 2050 will be firmed up over time and will require advances in technology.
The company also announced it has committed to a target of achieving 60 per cent recycled content for glass beverage containers by 2025.
“Sustainability is integral to the way we operate at Orora. In Australasia, we increased the use of recycled glass at our production site at Gawler, now taking the majority of recycled glass from the WA and SA Container Deposit Schemes and accessing other state initiatives where we can,” Lowe said.
“Renewable energy provided 80 per cent of our total domestic electricity requirements, secured through wind-generated electricity.
“Our redefined approach to sustainability and our commitment to achieving net zero scope 1 and 2 greenhouse gas emissions by 2050, and 40 per cent by 2035, along with our glass recycling target of 60 per cent by 2025, are the next significant and logical steps in our sustainability journey.”
Moving forward, Orora expects its FY22 EBIT to be broadly in line with FY21 in Australasia.
It added that continued strength in the cans business is expected to offset the impact of subdued glass volumes as the impacts of China wine tariffs are cycled in 1H22.
“Positive momentum is expected to continue into FY22 and correspondingly, we are forecasting further growth in underlying group earnings. This outlook remains subject to global and domestic economic conditions, currency fluctuations and the continuing impacts of the COVID-19 pandemic,” Lowe said.