|
Quarter Ended (1) |
|
Year-To-Date Ended (1) |
||||
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
(thousands of US dollars, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
283,496 |
|
287,464 |
|
560,279 |
|
591,980 |
Net income |
39,019 |
|
40,017 |
|
74,794 |
|
78,753 |
|
|
|
|
|
|
|
|
Income tax expense |
14,981 |
|
13,538 |
|
28,628 |
|
26,986 |
Net finance income |
(5,932) |
|
(3,884) |
|
(12,106) |
|
(7,518) |
Depreciation and amortization |
13,047 |
|
11,950 |
|
25,700 |
|
24,046 |
EBITDA (2) |
61,115 |
|
61,621 |
|
117,016 |
|
122,267 |
|
|
|
|
|
|
|
|
Net income attributable to equity holders of the Company |
38,825 |
|
40,006 |
|
74,347 |
|
79,293 |
Net income (loss) attributable to non-controlling interests |
194 |
|
11 |
|
447 |
|
(540) |
Net income |
39,019 |
|
40,017 |
|
74,794 |
|
78,753 |
|
|
|
|
|
|
|
|
Basic and diluted earnings per share (cents) |
61 |
|
62 |
|
116 |
|
122 |
|
|
|
|
|
|
|
|
1 The 2024 fiscal year comprises 52 weeks and the 2023 fiscal year comprised 53 weeks. Each quarter of 2024 and 2023 comprises 13 weeks with the exception of the first quarter of 2023, which comprised 14 weeks.
2 EBITDA is not a recognized measure under IFRS Accounting Standards (IFRS). Management believes that in addition to net income, this measure provides useful supplemental information to investors including an indication of cash available for distribution prior to debt service, capital expenditures, payment of lease liabilities and income taxes. Investors should be cautioned, however, that this measure should not be construed as an alternative to net income, determined in accordance with IFRS, as an indicator of the Company's performance. The Company's method of calculating this measure may differ from other companies and, accordingly, the results may not be comparable.
(presented in US dollars)
Forward-looking statements: Certain statements made in the following report contain forward-looking statements including, but not limited to, statements concerning possible or assumed future results of operations of the Company. Forward-looking statements represent the Company's intentions, plans, expectations and beliefs, and are not guarantees of future performance. Such forward-looking statements represent
Financial Performance
Net income attributable to equity holders of the Company (Earnings) for the second quarter of 2024 of
For the six months ended
The fiscal year of the Company ends on the last Sunday of the calendar year and is usually 52 weeks in duration. However, the 2023 fiscal year consisted of 53 weeks, with the first quarter comprising 14 weeks, one more week than the current year. The additional week included in the 2023 first quarter was essentially the last week of the 2022 calendar year which contained several statutory holidays. Consequently, it is estimated that this additional week contributed 3.0 percent to 2023 first half sales volumes and net income results.
Operating Segments and Product Groups
The Company provides three distinct types of packaging technologies: a) flexible packaging, b) rigid packaging and flexible lidding and c) packaging machinery. Each is deemed to be a separate operating segment.
The flexible packaging segment includes the modified atmosphere packaging, specialty films and biaxially oriented nylon product groups. Modified atmosphere packaging extends the shelf life of perishable foods, while at the same time maintains or improves the quality of the product. The packaging is used for a wide range of markets and applications, including fresh and processed meats, poultry, cheese, medical device packaging, high performance pouch applications and high-barrier films for converting applications. Specialty films include a full line of barrier and non-barrier films which are ideal for converting applications such as printing, laminating and bag making, including shrink bags. Biaxially oriented nylon film is stretched by length and width to add stability for further conversion using printing, metalizing or laminating processes and is ideal for food packaging applications such as cheese, fluid and viscous liquids, and industrial applications such as book covers and balloons.
The rigid packaging and flexible lidding segment includes the rigid containers, lidding and specialized printed packaging product groups. Rigid containers include portion control and single-serve containers, as well as plastic sheet, custom and retort trays, which are used for applications such as food, pet food, beverage, dairy, industrial and healthcare. Lidding products are available in die-cut, daisy chain and rollstock formats and are used for applications such as food, dairy, beverage, pet food, industrial and healthcare. Specialized printed packaging provides packaging solutions to the pharmaceutical, healthcare, nutraceutical, cosmetic and personal care markets.
Packaging machinery includes a full line of horizontal fill/seal machines for preformed containers and vertical form/fill/seal pouch machines for pumpable liquid and semi-liquid products and certain dry products.
Revenue
Revenue in the second quarter of 2024 was
For the first six months of 2024, revenue fell by 5.4 percent to
Gross Profit Margins
Gross profit margins in the current quarter of 32.5 percent of revenue ascended by 2.3 percentage points from the 2023 second quarter result of 30.2 percent of revenue. Raw material cost reductions significantly outpaced the corresponding selling price decreases, which included the pass-through of indexing adjustments. Additionally, enhanced output levels decreased the effective cost of production. The Company's cost structure was adversely affected by higher personnel, depreciation and consumables expenses.
Gross profit margins in the first six months of 2024 climbed by 2.3 percentage points to 31.8 percent of revenue from the 29.5 percent recorded in the 2023 year-to-date comparative period. Despite the negative impact on selling prices of heightened competitive pressures and the pass-through of indexing adjustments, material costs declined to a greater extent, generating an increase in Earnings of
During the second quarter of 2024, the raw material purchase price index experienced a decrease of 3 percent compared to the initial quarter of 2024. Over the past 12 months, the index dropped by 2 percent. In the second quarter, polyethylene and nylon resins had the most substantial reductions of 5 percent and 4 percent, respectively.
Expenses and Other
Operating expenses in the second quarter of 2024, exclusive of foreign exchange, progressed at a rate of 11.6 percent whereas sales volumes increased by 0.4 percent, resulting in a reduction in Earnings of
On a year-to-date basis, operating expenses, adjusted for foreign exchange, advanced at a rate of 8.7 percent in comparison to the 2.8 percent reduction in sales volumes, thereby having an unfavorable impact on Earnings of
Capital Resources, Cash Flow and Liquidity
On
The Company's cash and cash equivalents balance ended the second quarter of 2024 at
For the first half of 2024, the cash and cash equivalents balance declined by
Summary of Quarterly Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thousands of US dollars, except per share amounts (US cents) |
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2022 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
283,496 |
|
276,783 |
|
275,637 |
|
273,790 |
|
287,464 |
|
304,516 |
|
292,365 |
|
302,532 |
Net income attributable to equity holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of the Company |
38,825 |
|
35,522 |
|
34,846 |
|
33,991 |
|
40,006 |
|
39,287 |
|
31,235 |
|
29,567 |
EPS |
61 |
|
55 |
|
54 |
|
52 |
|
62 |
|
60 |
|
48 |
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Looking Forward
Building upon the positive profitability performance of the most recent quarter,
For the balance of 2024, sales volumes will be positively impacted by new rigid container and retort pet food lidding business. In addition, the completion of much needed capacity expansions within the modified atmosphere packaging facility will facilitate further volume growth. For the remainder of 2024, the Company projects sales volume growth to be in the range of 4 to 6 percent.
With raw material costs dropping by 3 percent over the past three months, the pass-through of these decreases to customers with formal price indexing arrangements will be implemented, on average, after a time lag of four months. In the next two quarters, market expectations are that overall resin prices will be relatively stable with some materials projected to increase moderately. The current rate of inflation remains above recent norms and key components of the Company's cost structure continue to be impacted, especially personnel expenses. This is compounded by challenges in attracting and retaining personnel, putting further pressure on compensation levels. Within certain product markets, customer expectations for lower selling prices remains heightened. In contrast, forecasted sales volume growth would serve to lower the overall cost of production on a per unit basis. Taking the above factors into account, gross profit margins for the second half of 2024 should be similar to the level achieved in the most recently completed quarter.
Capital expenditures of approximately
Interim Condensed Consolidated Financial Statements
Second Quarter Ended:
These interim condensed consolidated financial statements have not been audited or reviewed by the Company's independent external auditors,
|
|
|
|
|
|
Condensed Consolidated Balance Sheets |
|
|
|
|
|
(thousands of US dollars) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
|
490,333 |
|
541,870 |
Trade and other receivables |
|
|
214,486 |
|
207,355 |
Income taxes receivable |
|
|
7,461 |
|
4,565 |
Inventories |
|
|
227,083 |
|
219,763 |
Prepaid expenses |
|
|
8,783 |
|
8,942 |
Derivative financial instruments |
|
|
- |
|
1,542 |
|
|
|
948,146 |
|
984,037 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
Property, plant and equipment |
|
|
592,701 |
|
543,387 |
Intangible assets and goodwill |
|
|
31,087 |
|
31,833 |
Employee benefit plan assets |
|
|
11,200 |
|
12,209 |
|
|
|
634,988 |
|
587,429 |
Total assets |
|
|
1,583,134 |
|
1,571,466 |
|
|
|
|
|
|
Equity and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Trade payables and other liabilities |
|
|
101,141 |
|
89,359 |
Contract liabilities |
|
|
950 |
|
1,478 |
Provisions |
|
|
600 |
|
- |
Income taxes payable |
|
|
2,489 |
|
3,109 |
Derivative financial instruments |
|
|
765 |
|
- |
|
|
|
105,945 |
|
93,946 |
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
Employee benefit plan liabilities |
|
|
5,861 |
|
6,362 |
Deferred income |
|
|
17,878 |
|
18,062 |
Provisions and other long-term liabilities |
|
|
11,387 |
|
12,685 |
Deferred tax liabilities |
|
|
52,547 |
|
56,762 |
|
|
|
87,673 |
|
93,871 |
Total liabilities |
|
|
193,618 |
|
187,817 |
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Share capital |
|
|
28,319 |
|
29,195 |
Reserves |
|
|
(622) |
|
1,361 |
Retained earnings |
|
|
1,327,770 |
|
1,319,491 |
Total equity attributable to equity holders of the Company |
|
|
1,355,467 |
|
1,350,047 |
Non-controlling interests |
|
|
34,049 |
|
33,602 |
Total equity |
|
|
1,389,516 |
|
1,383,649 |
Total equity and liabilities |
|
|
1,583,134 |
|
1,571,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Income |
|
|
|
|
|
|
|
|
|
(thousands of US dollars, except per share amounts) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year-To-Date Ended |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
283,496 |
|
287,464 |
|
560,279 |
|
591,980 |
Cost of sales |
|
|
(191,431) |
|
(200,563) |
|
(382,022) |
|
(417,229) |
Gross profit |
|
|
92,065 |
|
86,901 |
|
178,257 |
|
174,751 |
|
|
|
|
|
|
|
|
|
|
Sales, marketing and distribution expenses |
|
|
(24,418) |
|
(22,559) |
|
(49,067) |
|
(47,953) |
General and administrative expenses |
|
|
(12,414) |
|
(9,595) |
|
(25,134) |
|
(20,111) |
Research and technical expenses |
|
|
(5,435) |
|
(5,480) |
|
(10,731) |
|
(9,758) |
Other (expenses) income |
|
|
(1,730) |
|
404 |
|
(2,009) |
|
1,292 |
Income from operations |
|
|
48,068 |
|
49,671 |
|
91,316 |
|
98,221 |
Finance income |
|
|
7,094 |
|
5,461 |
|
14,628 |
|
10,453 |
Finance expense |
|
|
(1,162) |
|
(1,577) |
|
(2,522) |
|
(2,935) |
Income before income taxes |
|
|
54,000 |
|
53,555 |
|
103,422 |
|
105,739 |
Income tax expense |
|
|
(14,981) |
|
(13,538) |
|
(28,628) |
|
(26,986) |
Net income for the period |
|
|
39,019 |
|
40,017 |
|
74,794 |
|
78,753 |
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
Equity holders of the Company |
|
|
38,825 |
|
40,006 |
|
74,347 |
|
79,293 |
Non-controlling interests |
|
|
194 |
|
11 |
|
447 |
|
(540) |
|
|
|
39,019 |
|
40,017 |
|
74,794 |
|
78,753 |
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share - cents |
|
|
61 |
|
62 |
|
116 |
|
122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income |
|
|
|
|
|
|
|
|
|
(thousands of US dollars) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year-To-Date Ended |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
Net income for the period |
|
|
39,019 |
|
40,017 |
|
74,794 |
|
78,753 |
|
|
|
|
|
|
|
|
|
|
Items that will not be reclassified to the statements of income: |
|
|
|
|
|
|
|
|
|
Cash flow hedge (losses) gains recognized |
|
|
(354) |
|
478 |
|
(1,160) |
|
766 |
Cash flow hedge losses (gains) transferred to property, plant and equipment |
|
|
115 |
|
(17) |
|
64 |
|
(17) |
|
|
|
(239) |
|
461 |
|
(1,096) |
|
749 |
Items that are or may be reclassified subsequently to the statements of income: |
|
|
|
|
|
|
|
|
|
Cash flow hedge (losses) gains recognized |
|
|
(508) |
|
544 |
|
(1,563) |
|
954 |
Cash flow hedge losses transferred to the statements of income |
|
|
344 |
|
632 |
|
352 |
|
918 |
Income tax effect |
|
|
44 |
|
(315) |
|
324 |
|
(502) |
|
|
|
(120) |
|
861 |
|
(887) |
|
1,370 |
Other comprehensive (loss) income for the period - net of income tax |
|
|
(359) |
|
1,322 |
|
(1,983) |
|
2,119 |
Comprehensive income for the period |
|
|
38,660 |
|
41,339 |
|
72,811 |
|
80,872 |
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
Equity holders of the Company |
|
|
38,466 |
|
41,328 |
|
72,364 |
|
81,412 |
Non-controlling interests |
|
|
194 |
|
11 |
|
447 |
|
(540) |
|
|
|
38,660 |
|
41,339 |
|
72,811 |
|
80,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Changes in Equity |
|
|
|
|
|
|
|
(thousands of US dollars) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity holders of the Company |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
Share |
|
Retained |
|
controlling |
|
|
|
capital |
Reserves |
earnings |
Total |
interests |
Total equity |
|
|
|
|
|
|
|
|
Balance at |
|
29,195 |
(972) |
1,174,551 |
1,202,774 |
36,001 |
1,238,775 |
|
|
|
|
|
|
|
|
Comprehensive income for the period |
|
|
|
|
|
|
|
Cash flow hedge gains, net of tax |
|
- |
1,464 |
- |
1,464 |
- |
1,464 |
Cash flow hedge losses transferred to the statements |
|
|
|
|
|
|
|
of income, net of tax |
|
- |
672 |
- |
672 |
- |
672 |
Cash flow hedge gains transferred to property, plant and |
|
|
|
|
|
|
|
equipment |
|
- |
(17) |
- |
(17) |
- |
(17) |
Other comprehensive income |
|
- |
2,119 |
- |
2,119 |
- |
2,119 |
Net income (loss) for the period |
|
- |
- |
79,293 |
79,293 |
(540) |
78,753 |
Comprehensive income (loss) for the period |
|
- |
2,119 |
79,293 |
81,412 |
(540) |
80,872 |
|
|
|
|
|
|
|
|
Dividends |
|
- |
- |
(2,914) |
(2,914) |
- |
(2,914) |
|
|
|
|
|
|
|
|
Balance at |
|
29,195 |
1,147 |
1,250,930 |
1,281,272 |
35,461 |
1,316,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at |
|
29,195 |
1,361 |
1,319,491 |
1,350,047 |
33,602 |
1,383,649 |
|
|
|
|
|
|
|
|
Comprehensive (loss) income for the period |
|
|
|
|
|
|
|
Cash flow hedge losses, net of tax |
|
- |
(2,305) |
- |
(2,305) |
- |
(2,305) |
Cash flow hedge losses transferred to the statements |
|
|
|
|
|
|
|
of income, net of tax |
|
- |
258 |
- |
258 |
- |
258 |
Cash flow hedge losses transferred to property, plant and |
|
|
|
|
|
|
|
equipment |
|
- |
64 |
- |
64 |
- |
64 |
Other comprehensive loss |
|
- |
(1,983) |
- |
(1,983) |
- |
(1,983) |
Net income for the period |
|
- |
- |
74,347 |
74,347 |
447 |
74,794 |
Comprehensive (loss) income for the period |
|
- |
(1,983) |
74,347 |
72,364 |
447 |
72,811 |
|
|
|
|
|
|
|
|
Dividends |
|
- |
- |
(2,818) |
(2,818) |
- |
(2,818) |
Repurchase of common shares |
|
(876) |
- |
(63,250) |
(64,126) |
- |
(64,126) |
|
|
|
|
|
|
|
|
Balance at |
|
28,319 |
(622) |
1,327,770 |
1,355,467 |
34,049 |
1,389,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows |
|
|
|
|
|
|
|
(thousands of US dollars) (unaudited) |
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year-To-Date Ended |
||||
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
Cash provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities: |
|
|
|
|
|
|
|
Net income for the period |
39,019 |
|
40,017 |
|
74,794 |
|
78,753 |
Items not involving cash: |
|
|
|
|
|
|
|
Depreciation |
13,086 |
|
11,952 |
|
25,766 |
|
24,039 |
Amortization - deferred income |
(426) |
|
(421) |
|
(844) |
|
(839) |
Amortization - intangible assets |
387 |
|
419 |
|
778 |
|
846 |
Employee defined benefit plan expenses |
697 |
|
1,072 |
|
1,356 |
|
1,823 |
Net finance income |
(5,932) |
|
(3,884) |
|
(12,106) |
|
(7,518) |
Income tax expense |
14,981 |
|
13,538 |
|
28,628 |
|
26,986 |
Other |
(652) |
|
(854) |
|
(1,017) |
|
(2,254) |
Cash flow from operating activities before the following |
61,160 |
|
61,839 |
|
117,355 |
|
121,836 |
Change in working capital: |
|
|
|
|
|
|
|
Trade and other receivables |
(12,509) |
|
2,092 |
|
(7,131) |
|
5,694 |
Inventories |
(9,951) |
|
13,794 |
|
(7,320) |
|
20,365 |
Prepaid expenses |
1,754 |
|
(1,296) |
|
159 |
|
(3,743) |
Trade payables and other liabilities |
(1,180) |
|
(10,423) |
|
10,995 |
|
(21,012) |
Contract liabilities |
391 |
|
(503) |
|
(528) |
|
(1,835) |
|
|
|
|
|
|
|
|
Employee defined benefit plan contributions |
(19) |
|
(28) |
|
(1,174) |
|
(785) |
Income tax paid |
(23,803) |
|
(20,856) |
|
(34,598) |
|
(46,373) |
Interest received |
6,686 |
|
5,141 |
|
14,078 |
|
10,082 |
Interest paid |
(1,062) |
|
(1,593) |
|
(2,328) |
|
(2,962) |
Net cash from operating activities |
21,467 |
|
48,167 |
|
89,508 |
|
81,267 |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
Acquisition of property, plant and equipment - net |
(27,086) |
|
(12,142) |
|
(74,429) |
|
(21,585) |
Acquisition of intangible assets |
(9) |
|
(79) |
|
(32) |
|
(286) |
|
(27,095) |
|
(12,221) |
|
(74,461) |
|
(21,871) |
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
Payment of lease liabilities |
(402) |
|
(227) |
|
(799) |
|
(446) |
Dividends paid |
(1,436) |
|
(1,443) |
|
(2,907) |
|
(2,877) |
Repurchase of common shares |
(56,567) |
|
- |
|
(62,878) |
|
- |
|
(58,405) |
|
(1,670) |
|
(66,584) |
|
(3,323) |
|
|
|
|
|
|
|
|
Change in cash and cash equivalents |
(64,033) |
|
34,276 |
|
(51,537) |
|
56,073 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period |
554,366 |
|
420,470 |
|
541,870 |
|
398,673 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
490,333 |
|
454,746 |
|
490,333 |
|
454,746 |
|
|
|
|
|
|
|
|
SOURCE