Challenges during the third quarter of its financial year impacted revenue for AMG packaging, but the company was able to report improved profits for the nine months of its financial year.

Gains were due to cost containment in its manufacturing operation which saw expenditure in this segment fall 11 per cent to $316.9 million.

Net profit improved 29.39 per cent to $67.86 million, up from 52.44 million for the nine months to May 2015.

Overall, administrative costs for the nine months to May increased 16 per cent and revenues were flat at $463.4 million for the period, compared to $462.32 last year, but savings were realised from reduced raw material pricing and other costs which fell, causing manufacturing costs overall to decline.

Michael Chin, general manager, told the

Jamaica Observer that as soon as distribution hiccups are ironed out, its new toilet paper product– Tishoo – is set to hit the market.

The product is expected to gain around a 50 per cent improvement in revenue.

AMG made $633 million in the year ended August 31, 2015, and $607 million the year before.

Chin said, “At full roll-out we expect approximately $300 million annually [in new sales].”

To date, approximately $59 million was spent on equipment and operating costs for the toilet paper project.

The tissue paper has been approved by the Bureau of Standards, with the general manager explaining that there was a delay on the approval of the labelling: “…however, the Bureau is currently reviewing their standards. We have been cleared to go to market.”

The company will also be rolling out other products in this line and has applied for the registration of other brand names and is awaiting approval.

The product should have hit the shelves in the last quarter, but did not due to a major disaster affecting the chosen distributor who Chin declined to name.

The problem, the general manager said, will be resolved soon, noting, “We have an agreement with a major distributor granting them exclusive rights to the Tishoo brand. Due to our dialogue with them, we are confident that Tishoo will be on shelves soon.”

For the third quarter, profit fell 32.3 per cent from $20.76 million in 2015 to $15.69 million this year, due partially to increases in administrative costs , depreciation and the failure of the toilet paper project to launch.

Cash resources declined to $62.7 million, down from $72.5 million at the end of the period.

Revenue was flat at $158.35 million compared to $160.65 million, a 1.4 per cent decline.

Chin commented, “The third quarter was a challenging one.” He outlined that depreciation of the Jamaican dollar caused costs to rise approximately five per cent more.

“Due to the fluctuation of the dollar, we had to negotiate better prices for our paper and get more discounts. Depreciation increased costs on our locally supplied inputs, eg starch, electricity, water, LPG, etc,” he told the

Business Observer.

Problems affecting equipment which makes the company’s corrugated paper presented another challenge.

The company head said that technicians from China would be coming to inspect and make recommendations to repair the corrugator which fuses paper together and which is used during the box-making process.