AMG Packaging profits as manufacturing costs fall

 

Audited results released in November 2024 for AMG Packaging and Paper Company Limited disclosed net profit at year-end August 31, 2024, of $136.3 million, up from $89.3 million at year end 2023. EPS was $0.26 compared to $0.17 for the similar period in 2023.



Managing Director   George Hugh in comments accompanying unaudited financial statements for the 4th Quarter said reduced revenues were due to the economic downturn with smaller customer orders. However, manufacturing costs also declined by double digits to the benefit of the company’s bottom line.

Total manufacturing costs for the 12-month period to August 31, 2024, decreased by 10.28 per cent, moving from $699.66 million to $627.75 million, while these costs for Q4 2024 decreased by 1.62 per cent, moving from $151.54 million to $149.09 million.

Hugh said, “This again was due mainly to the increase in efficiencies in our production processes.”

In 2023 the company hit the revenue target of $1 billion in sales. The results for the financial year showed an increase of 1.65 per cent in revenues moving from $995.7 million (2022) to $1.01 billion (2023).

However, a contraction in the local economy has affected performance with revenues for the 12-month period to August 31, 2024, showing a decrease of 1.23 per cent, moving from $1.01 billion to $999.65 million.

The Managing Director said that efficiency measures have had impact.

For the 3-month period ending August 2024, revenues increased by 1.94 per cent, moving from $230.27 million to $234.72 million. For Q4 2024, net Income increased by 42.66 per cent, moving from $30.50 million to $43.52 million.

Hugh attributed the increase is due principally y to the reduction in manufacturing costs, and new cash management policies that resulted in high interest income when compared to previous years.

At year end this year, cash and cash equivalents was $360.5 million, up from $296.7 million at August 31, 2023.

AMG has   purchased and will install new equipment in 2025. The company manufactures, distributes, and retails cartons including s corrugated, die-cut, specialty, and custom boxes, as well as warehousing products for liquid bulk, beverage, poultry, and storage applications.

Started in 2005, saw the need for a local manufacturer of boxes. At the time, 95 per cent of boxes were being imported for use in Jamaica. Located in an 8,000 square foot building in the Free Zone, the company started with five machines, 12 employees and 20 clients, only producing corrugated cardboard boxes.

When clientele increased to 200 management purchased a 20,000 square foot building at 10 Retirement Crescent. New machines were bought as well and the manufacturing process being 90 per cent mechanized.

Hugh outlined, “The decrease shown for the financial year is mainly attributed to the downturn in the economy which was reflected in the reduced orders from our customers.”

AMG, however, saw improved year end results as manufacturing costs fell. Net income for the 12-month period to August 31, 2024, showed an increase of 43.34 per cent, moving from $133.00 million to $190.65 million. For Q4 2024, net Income increased by 42.66 per cent, moving from $30.50 million to $43.52 million.

Hugh said that AMG has engaged an enterprise resource planning (ERP) company to help develop, train, and install an ERP system from which significant efficiencies are expected. The rollout is slated for Q1 of the 2025 fiscal year.

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