The world’s biggest packaging company, Amcor, has downgraded its full year profit forecast by five per cent, as consumers rein in their spending around the world due to inflationary pressures.
The third quarter results saw the nine month EBIT down by 2.5 per cent to US$1.173bn, on net sales that rose by four per cent to US$11bn from US$10.65bn.
Amcor's share price took a tumble on its profit downgrade, falling from $16.50 to $14.80, before recovering slightly to $15.10, its lowest point since April last year.
The company says consumers are looking to shop smarter, for instance buying one large size food product rather than multiple small sizes. It also says retailers are destocking after building up their inventories during Covid.
Speaking on the third quarter figures, Ron Delia, CEO of Amcor, said, “We were cautious on market dynamics entering the third quarter and continued to take decisive price and cost actions. These efforts helped offset continued softness and increased volatility in the demand environment, leading to a modest decline of 2.5 per cent in adjusted EBIT for the third quarter.
“We have adjusted our 2023 outlook to reflect the challenging operating environment.” THe company has reduced its full-year forecast for earnings per share to between US72¢ and US74¢ a share, from the previous forecast of between US77¢ and US81¢ a share.
In the nine months to 31 March, sales of Flexibles grew to US$8.4bn from US$8.2bn last year, while Rigids grew to US$2.64bn from US$2.54bn.
Having sold its Russian business following the invasion of Ukraine last year, Amcor now operates in 43 countries, from some 220 plants. Almost all its packaging of bottles, wrappers, containers and pouches is for consumer staples.
In a world first, it has just launched new paper-based wraps for Mars Wrigley in Australia, for the Mars bar, Milky Way and Snickers products.
