Orora (ASX:ORA) share price slumps despite 34% profit surge

The Aussie manufacturer’s shares have fallen lower on Thursday morning
The post Orora (ASX:ORA) share price slumps despite 34% profit surge appeared first on The Motley Fool Australia. –

The Orora Ltd (ASX: ORA) share price is slumping lower on Thursday morning after the company reported its latest full-year results.

Let’s take a closer look at what the packaging provider announced.

Orora share price falls despite growth figures

Orora reported its full-year results for the year ended 30 June 2021 (FY21), including the below:

Total sales revenue down 0.8% to $3,538.0 million (up 7.8% on a constant currency basis)
Earnings before interest, tax, depeciation and amortisation (EBITDA) up 5.9% to $369.3 million
Underlying net profit after tax (NPAT) up 23.7% (34.1% in constant currency) to $156.7 million.
Earnings per share (EPS) up 29.0% to 16.9 cents

Dividend per share up 16.7% to 14.0 cents

At the time of writing, the Orora share price has slumped by 3.63% to $2.25 despite these headline growth figures.

What happened in FY21 for Orora?

Orora reported stronger volumes in cans and closures in its Australasian business during the year with “significantly improved” financial performance in North America.

However, the company did report weakness in its glass segment. That was largely due to lower China exports and cost headwinds associated with energy and insurance impacted on earnings.

The Orora share price initially climbed in early trade following the release but is falling as the broader market retreats.

What did management say?

Managing director and CEO Brian Lowe said:

We were pleased to report an increase in both net profit after tax and underlying EBIT [earnings before interest and taxes], demonstrating a solid contribution from all of our business groups across Australasia and North America.

In Australasia, the increase in EBIT was largely a result of stronger volumes across cans and closures, partially offset by declines in glass as the impact of lower exports to China crystallised.

North America delivered a 43.0% increase in EBIT on a constant currency basis, reflecting the disclipined focus on cost control and profit improvement programs, as well as improved trading conditions in the second half of the year.

A strong balance sheet and cash flow provides the company with flexibility. We head into FY22 with positive momentum and the ability to invest where it will deliver the greatest long-term value.

What’s next for Orora and its share price?

Orora is forecasting EBIT for FY22 broadly in line with FY21. The company hopes strength in its cans business offsets the ongoing impact of Chinese tariffs on glass volumes.

The company is expecting “positive momentum” in the current financial year. However, its outlook remains subject to “global and domestic economic conditions, currency fluctuations and the continuing impact of the COVID-19 pandemic”.

Despite these challenges, the Orora share price has climbed 31% higher in 2021 and is outperforming the S&P/ASX 200 Index (ASX: XJO).

The post Orora (ASX:ORA) share price slumps despite 34% profit surge appeared first on The Motley Fool Australia.

Should you invest $1,000 in Orora right now?

Before you consider Orora, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Orora wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

How did the Bravura (ASX:BVS) share price react last earnings season?
The Mineral Resources (ASX:MIN) share price is down 8% on Thursday
HT&E (ASX:HT1) share price rockets 6% on revenue boost
Treasury Wine Estates (ASX:TWE) share price struggles despite profit increase
Why the Fatfish (ASX:FFG) share price is leaping 19% today

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!