Orora shares plunge on earnings downgrade
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More news: Orora shares tumbled 13.42% to $2.36 in early trading on the ASX after it downgraded its earnings outlook.
The downgrade was due to softer demand and volumes across its business.
Orora downgrades earnings outlook amid softer demand
The news: Packaging company Orora has downgraded its full-year earnings expectations citing softer demand and volumes across its business.
The numbers: Excluding the contribution from its September 2023 acquisition of French premium bottle maker Saverglass, Orora now expects full-year earnings before interest and tax to be in the range of $307 million to $317 million compared to $320.5 million in FY23.
Saverglass earnings (EBITDA) are likely to be between €84 million ($139 million) and €88 million, down from a previous estimate of €98 million.
The context: Orora said it continued to experience volume softness at its North American business in the March quarter, with a normal seasonal uplift in the June quarter also not likely to materialise. Ongoing softness in the glass business in Australasia has been offset by strong volumes in cans. However, the Saverglass business continued to see a weaker result in February and March as customer destocking continued.
Orora reported a sharp drop in first-half profit amid softening demand and higher costs related to its Saverglass deal. It acquired Saverglass for $2.26 billion with the aim of making it the centrepiece of its global glass business unit and operate as a third platform for growth, raising a combined $1.1 billion through a discounted institutional placement and rights entitlement offer to fund the buyout.
The source: ASX announcement
