Tue | Jan 22, 2019

AMG Packaging & Paper hurt by price increases

Published:Sunday | April 22, 2018 | 12:00 AMSteven Jackson
Chairman Barington Chisholm listens at left as General Manager Michael Chin addresses the annual general meeting of AMG Packaging & Paper Company Limited earlier this year.

AMG Packaging & Paper Limited (AMG), which makes cardboard boxes, suffered from reduced profits arising from increased paper prices on the global market.

"The cost of paper on the world market has significantly increased and continues to increase," stated Michael Chin, AMG general manager, in response to Financial Gleaner queries.

The company experienced a 24.5 per cent rise in direct costs associated with manufacturing over three months ending February, rising to $34 million when compared with $27.3 million a year earlier.

The pass-through to consumers occurred in the subsequent quarter.

"We passed on some of the increase to our customers in March," Chin said.

The company earned $0.01 per share during the quarter, compared to $0.03 a year earlier.

The company's revenues, however, continue to grow year on year. AMG made revenue of $162.5 million during its February 2018 quarter, compared to $153 million a year earlier. Its net profit from continuing operation dipped to $2.8 million from $18.5 million a year earlier.

The company categorised its toilet tissue business as a discontinued operation resulting in the costs associated with that venture largely off the books. During the quarter, the discontinued operations earned $4 million in revenues and recorded a $28 million loss.

In previous quarters, Chin explained that removing the toilet paper operations was aimed at paving a path to higher profitability.

"We are still in negotiations with the prospective buyer," said Chin about selling its toilet paper assets.

AMG was listed on the junior market of the Jamaica Stock Exchange in 2011. Its total assets equate to $699 million as at February 2018, with total capital of $476 million.