AMG optimistic despite challenges
Despite cost challenges and continued paper shortage, the management of AMG Packaging and Paper Company said it remains optimistic about driving growth and improving its business.
For the six months ended February, revenues the company grew marginally to total $500.8 million — 2.9 per cent above the prior year period. This, even as profit fell to $42.1 million and expenses climbed 28 per cent to reach $87.9 million. Total manufacturing cost for the period also inched up to $355.5 million.
Similarly, three months out-turns, which saw increased revenues of $246 million, was also constrained by upticks in manufacturing cost of $174.6 million (up 12.1 per cent) and total expenses of $43.9 million, up 8.8 per cent. Net profit slightly grew to $17.7 per cent.
The company’s management in an unaudited report to shareholders said that even as revenue growth continued to expand as a result of increased orders from existing customers, slight declines in the cost of inventories “as a result of a drop in shipping cost” and an instability of paper prices due to global shortages, impacted its performance over the period.
“Our direct cost showed a slight increase which came as a result of machine maintenance work which started towards the end of the first quarter and continued into the second quarter,” management said in outlining some of the challenges.
“We continue to experience the volatility of the foreign exchange rate, which has also resulted in a foreign exchange loss for the period. The increase in depreciation is a direct result of a re-evaluation exercise which was done towards the last of the financial year,” it also noted.
The corrugated cardboard manufacturer, which has for the last few years taken heavy hits from the novel coronavirus pandemic among other challenges, has had to for consecutive quarters deal with fallout in its business. Now steadily on a path to recovery, the company through the addition of a new plant and greater use of recycled paper is pushing to increase capacity and to up market share.
“The management team remains optimistic about the direction of our company,” the report stated.
At the end of February total assets for the company stood at $1.5 billion.
