The Amcor (ASX: AMC) share price is in focus today after the packaging business revealed how it did in the first quarter of FY22.
FY21 first quarter
Amcor reported that its statutory net income rose 2% to $202 million, whilst statutory profit/earnings per share (EPS) grew by 4% to 13.1 cents.
However, Amcor showed that in underlying terms, the business grew quicker.
Amcor’s adjusted EBIT (EBIT explained) rose 7% on a ‘comparable constant currency basis’ to $381 million. Meanwhile, adjusted EPS grew 12% to 17.7 cents on a comparable constant currency basis.
Dividends and share buyback
The board of Amcor decided to increase the quarterly dividend to 12 cents per share. It also repurchased $64 million of shares during the quarter.
Management comments
The Amcor CEO Ron Delia said this quarter was in line with expectations and it did well considering the supply chain problems. He said:
“While sales were tempered in some parts of the business by raw material shortages, we prioritised as much as possible security of supply for our customers, recovery of higher input costs and sales mix management.
“We held margins flat in our flexibles segment and navigated through a particularly dynamic and complex environment in the rigid packaging business to deliver another quarter of double digit EPS growth.
“Regardless of short-term dynamics, we remain laser-focused on executing our strategy for long-term value creation.”
Outlook for Amcor and the share price
The packaging business reaffirmed its outlook for FY22. Adjusted EPS is still expected to grow by between 7% to 11% on a comparable constant currency basis. It’s also expecting that ‘adjusted free cash flow’ will end up between $1.1 billion to $1.2 billion for the year.
Amcor seems like one of those industrial businesses that is strong and effective at what it does, delivering dependable dividends for shareholders and improving the per-share returns with the share buyback. Its profit continues to rise.
I think it’s worth considering as one of the blue chip ASX dividend shares, but there may be other businesses that can deliver more growth.
