|
Quarter Ended (1) |
|
Year Ended (1) |
||||
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
(thousands of US dollars, except per share amounts) |
|
|
|
|
|
|
|
Revenue |
275,637 |
|
292,365 |
|
1,141,407 |
|
1,181,133 |
Net income |
35,016 |
|
30,838 |
|
147,593 |
|
128,225 |
|
|
|
|
|
|
|
|
Income tax expense |
13,244 |
|
11,240 |
|
52,200 |
|
45,861 |
Net finance income |
(6,543) |
|
(1,790) |
|
(19,094) |
|
(1,802) |
Depreciation and amortization |
11,922 |
|
11,918 |
|
47,834 |
|
47,699 |
EBITDA (2) |
53,639 |
|
52,206 |
|
228,533 |
|
219,983 |
|
|
|
|
|
|
|
|
Net income attributable to equity holders of the Company |
34,846 |
|
31,235 |
|
148,130 |
|
128,343 |
Net income (loss) attributable to non-controlling interests |
170 |
|
(397) |
|
(537) |
|
(118) |
Net income |
35,016 |
|
30,838 |
|
147,593 |
|
128,225 |
|
|
|
|
|
|
|
|
Basic and diluted earnings per share (cents) |
54 |
|
48 |
|
228 |
|
197 |
|
|
|
|
|
|
|
|
|
|
1 The 2023 fiscal year comprised 53 weeks and the 2022 fiscal year comprised 52 weeks. Each quarter of 2023 and 2022 comprised 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 for the fourth quarter of 2023 amounted to
For the year 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 prior 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 1.5 percent to 2023 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 fourth quarter of 2023 was
For 2023, revenue of
Gross Profit Margins
Gross profit margins in the current quarter of 28.8 percent of revenue ascended by 1.6 percentage points from the 2022 fourth quarter result of 27.2 percent of revenue. The magnitude of raw material cost savings significantly outpaced the corresponding reduction in selling prices. The favorable differential enhanced EPS by
For the current year, gross profit margins of 29.3 percent of revenue exceeded the 2022 level of 28.1 percent. Accordingly, EPS climbed by
The raw material purchase price index dropped by 2 percent compared to the third quarter of 2023. Over the past year, the index has declined by 14 percent. During the fourth quarter, nylon resin and aluminum foil each realized decreases ranging between 8 and 11 percent. Conversely, polypropylene resin experienced an increase of 6 percent.
Expenses and Other
Operating expenses in the fourth quarter of 2023, exclusive of foreign exchange, were virtually unchanged relative to the reduction in sales volumes of 1.5 percent, thereby subtracting
For the 2023 fiscal year, operating expenses, adjusted for foreign exchange, increased at a rate of 0.9 percent compared to the drop in sales volumes of 1.9 percent, having a negative impact on EPS of
Capital Resources, Cash Flow and Liquidity
The Company's cash and cash equivalents balance ended the current year at
For the year, the cash and cash equivalents balance climbed by
Summary of Quarterly Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thousands of US dollars, except per share amounts (US cents) |
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
275,637 |
|
273,790 |
|
287,464 |
|
304,516 |
|
292,365 |
|
302,532 |
|
310,254 |
|
275,982 |
Net income attributable to equity holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of the Company |
34,846 |
|
33,991 |
|
40,006 |
|
39,287 |
|
31,235 |
|
29,567 |
|
33,671 |
|
33,870 |
EPS |
54 |
|
52 |
|
62 |
|
60 |
|
48 |
|
45 |
|
52 |
|
52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Looking Forward
Entering 2024, the Company anticipates a positive shift to sales volume growth in contrast to the temporary downturn experienced in 2023. Enhanced sales volumes would, in turn, improve profitability.
Now that inflation is approaching targets established by central banks, it is forecast they will transition to a monetary easing phase in 2024. The magnitude and pace of interest rate adjustments is unclear at the present time. Accordingly, the impact on economic growth is also uncertain. Changes to interest rates will directly influence the scale of net finance income earned by the Company.
To achieve volume growth in the upcoming year,
From a raw material perspective, after realizing sizeable cost reductions in 2023, current market expectations are for raw material costs to escalate moderately throughout 2024. Competitive pressures for lower selling prices in the Company's product markets are expected to persist in 2024 and apply additional pressure on gross profit margins. Consistent with 2023, with the limited availability of labor resources, employee compensation rates will be adjusted tactically in order to recruit and retain employees, further compressing gross profit margins. Overall, gross profit margins in 2024 should be slightly lower than the level recorded in 2023.
Capital expenditures of approximately
Interim Condensed Consolidated Financial Statements
Fourth 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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
|
541,870 |
|
398,673 |
Trade and other receivables |
|
|
207,355 |
|
204,040 |
Income taxes receivable |
|
|
4,565 |
|
3,573 |
Inventories |
|
|
219,763 |
|
288,118 |
Prepaid expenses |
|
|
8,942 |
|
5,602 |
Derivative financial instruments |
|
|
1,542 |
|
- |
|
|
|
984,037 |
|
900,006 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
Property, plant and equipment |
|
|
543,387 |
|
518,590 |
Intangible assets and goodwill |
|
|
31,833 |
|
33,110 |
Employee benefit plan assets |
|
|
12,209 |
|
10,783 |
|
|
|
587,429 |
|
562,483 |
Total assets |
|
|
1,571,466 |
|
1,462,489 |
|
|
|
|
|
|
Equity and Liabilities |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Trade payables and other liabilities |
|
|
89,359 |
|
102,382 |
Contract liabilities |
|
|
1,478 |
|
2,621 |
Income taxes payable |
|
|
3,109 |
|
18,393 |
Derivative financial instruments |
|
|
- |
|
1,328 |
|
|
|
93,946 |
|
124,724 |
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
Employee benefit plan liabilities |
|
|
6,362 |
|
8,334 |
Deferred income |
|
|
18,062 |
|
17,946 |
Provisions and other long-term liabilities |
|
|
12,685 |
|
12,062 |
Deferred tax liabilities |
|
|
56,762 |
|
60,648 |
|
|
|
93,871 |
|
98,990 |
Total liabilities |
|
|
187,817 |
|
223,714 |
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Share capital |
|
|
29,195 |
|
29,195 |
Reserves |
|
|
1,361 |
|
(972) |
Retained earnings |
|
|
1,319,491 |
|
1,174,551 |
Total equity attributable to equity holders of the Company |
|
|
1,350,047 |
|
1,202,774 |
Non-controlling interests |
|
|
33,602 |
|
36,001 |
Total equity |
|
|
1,383,649 |
|
1,238,775 |
Total equity and liabilities |
|
|
1,571,466 |
|
1,462,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Income |
|
|
|
|
|
|
|
|
|
(thousands of US dollars, except per share amounts) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year Ended |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
275,637 |
|
292,365 |
|
1,141,407 |
|
1,181,133 |
Cost of sales |
|
|
(196,245) |
|
(212,866) |
|
(807,255) |
|
(849,369) |
Gross profit |
|
|
79,392 |
|
79,499 |
|
334,152 |
|
331,764 |
|
|
|
|
|
|
|
|
|
|
Sales, marketing and distribution expenses |
|
|
(22,639) |
|
(23,210) |
|
(93,156) |
|
(95,378) |
General and administrative expenses |
|
|
(10,428) |
|
(10,010) |
|
(41,186) |
|
(38,783) |
Research and technical expenses |
|
|
(5,611) |
|
(5,119) |
|
(20,349) |
|
(18,249) |
Pre-production expenses |
|
|
- |
|
(486) |
|
- |
|
(3,401) |
Other income (expenses) |
|
|
1,003 |
|
(386) |
|
1,238 |
|
(3,669) |
Income from operations |
|
|
41,717 |
|
40,288 |
|
180,699 |
|
172,284 |
Finance income |
|
|
7,268 |
|
3,612 |
|
24,418 |
|
6,414 |
Finance expense |
|
|
(725) |
|
(1,822) |
|
(5,324) |
|
(4,612) |
Income before income taxes |
|
|
48,260 |
|
42,078 |
|
199,793 |
|
174,086 |
Income tax expense |
|
|
(13,244) |
|
(11,240) |
|
(52,200) |
|
(45,861) |
Net income for the period |
|
|
35,016 |
|
30,838 |
|
147,593 |
|
128,225 |
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
Equity holders of the Company |
|
|
34,846 |
|
31,235 |
|
148,130 |
|
128,343 |
Non-controlling interests |
|
|
170 |
|
(397) |
|
(537) |
|
(118) |
|
|
|
35,016 |
|
30,838 |
|
147,593 |
|
128,225 |
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share - cents |
|
|
54 |
|
48 |
|
228 |
|
197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income |
|
|
|
|
|
|
|
|
|
(thousands of US dollars) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year Ended |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net income for the period |
|
|
35,016 |
|
30,838 |
|
147,593 |
|
128,225 |
|
|
|
|
|
|
|
|
|
|
Items that will not be reclassified to the statements of income: |
|
|
|
|
|
|
|
|
|
Cash flow hedge gains recognized |
|
|
779 |
|
- |
|
912 |
|
- |
Cash flow hedge losses (gains) transferred to property, plant and equipment |
|
|
10 |
|
- |
|
(49) |
|
- |
Employee benefit plan remeasurements |
|
|
3,530 |
|
1,578 |
|
3,530 |
|
1,578 |
Income tax effect |
|
|
(898) |
|
(372) |
|
(898) |
|
(372) |
|
|
|
3,421 |
|
1,206 |
|
3,495 |
|
1,206 |
Items that are or may be reclassified subsequently to the statements of income: |
|
|
|
|
|
|
|
|
|
Cash flow hedge gains (losses) recognized |
|
|
724 |
|
(24) |
|
815 |
|
(1,703) |
Cash flow hedge losses transferred to the statements of income |
|
|
237 |
|
549 |
|
1,192 |
|
1,090 |
Income tax effect |
|
|
(257) |
|
(140) |
|
(537) |
|
165 |
|
|
|
704 |
|
385 |
|
1,470 |
|
-448 |
Other comprehensive income for the period - net of income tax |
|
|
4,125 |
|
1,591 |
|
4,965 |
|
758 |
Comprehensive income for the period |
|
|
39,141 |
|
32,429 |
|
152,558 |
|
128,983 |
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
Equity holders of the Company |
|
|
38,971 |
|
32,826 |
|
153,095 |
|
129,101 |
Non-controlling interests |
|
|
170 |
|
(397) |
|
(537) |
|
(118) |
|
|
|
39,141 |
|
32,429 |
|
152,558 |
|
128,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Changes in Equity |
|
|
|
|
|
|
|
(thousands of US dollars) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity holders of the Company |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- controlling interests |
|
|
|
Share capital |
|
Retained earnings |
|
|
|
|
|
Reserves |
Total |
Total equity |
|||
|
|
|
|
|
|
|
|
Balance at |
|
29,195 |
(524) |
1,050,949 |
1,079,620 |
36,119 |
1,115,739 |
|
|
|
|
|
|
|
|
Comprehensive (loss) income for the year |
|
|
|
|
|
|
|
Cash flow hedge losses, net of tax |
|
- |
(1,247) |
- |
(1,247) |
- |
(1,247) |
Cash flow hedge losses transferred to the statements |
|
|
|
|
|
|
|
of income, net of tax |
|
- |
799 |
- |
799 |
- |
799 |
Employee benefit plan remeasurements, net of tax |
|
- |
- |
1,206 |
1,206 |
- |
1,206 |
Other comprehensive (loss) income |
|
- |
(448) |
1,206 |
758 |
- |
758 |
Net income (loss) for the year |
|
- |
- |
128,343 |
128,343 |
(118) |
128,225 |
Comprehensive (loss) income for the year |
|
- |
(448) |
129,549 |
129,101 |
(118) |
128,983 |
|
|
|
|
|
|
|
|
Dividends |
|
- |
- |
(5,947) |
(5,947) |
- |
(5,947) |
|
|
|
|
|
|
|
|
Balance at |
|
29,195 |
(972) |
1,174,551 |
1,202,774 |
36,001 |
1,238,775 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at |
|
29,195 |
(972) |
1,174,551 |
1,202,774 |
36,001 |
1,238,775 |
|
|
|
|
|
|
|
|
Comprehensive income (loss) for the year |
|
|
|
|
|
|
|
Cash flow hedge gains, net of tax |
|
- |
1,509 |
- |
1,509 |
- |
1,509 |
Cash flow hedge losses transferred to the statements |
|
|
|
|
|
|
|
of income, net of tax |
|
- |
873 |
- |
873 |
- |
873 |
Cash flow hedge gains transferred to property, plant and |
|
|
|
|
|
|
|
equipment |
|
- |
(49) |
- |
(49) |
- |
(49) |
Employee benefit plan remeasurements, net of tax |
|
- |
- |
2,632 |
2,632 |
- |
2,632 |
Other comprehensive income |
|
- |
2,333 |
2,632 |
4,965 |
- |
4,965 |
Net income (loss) for the year |
|
- |
- |
148,130 |
148,130 |
(537) |
147,593 |
Comprehensive income (loss) for the year |
|
- |
2,333 |
150,762 |
153,095 |
(537) |
152,558 |
|
|
|
|
|
|
|
|
Dividends |
|
- |
- |
(5,822) |
(5,822) |
(1,862) |
(7,684) |
|
|
|
|
|
|
|
|
Balance at |
|
29,195 |
1,361 |
1,319,491 |
1,350,047 |
33,602 |
1,383,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows |
|
|
|
|
|
|
|
(thousands of US dollars) (unaudited) |
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year Ended |
||||
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
Cash provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities: |
|
|
|
|
|
|
|
Net income for the period |
35,016 |
|
30,838 |
|
147,593 |
|
128,225 |
Items not involving cash: |
|
|
|
|
|
|
|
Depreciation |
11,937 |
|
11,897 |
|
47,906 |
|
47,688 |
Amortization - deferred income |
(408) |
|
(404) |
|
(1,708) |
|
(1,687) |
Amortization - intangible assets |
393 |
|
425 |
|
1,636 |
|
1,698 |
Employee defined benefit plan expenses |
512 |
|
908 |
|
2,958 |
|
4,233 |
Net finance income |
(6,543) |
|
(1,790) |
|
(19,094) |
|
(1,802) |
Income tax expense |
13,244 |
|
11,240 |
|
52,200 |
|
45,861 |
Other |
(1,359) |
|
(686) |
|
(3,537) |
|
(3,046) |
Cash flow from operating activities before the following |
52,792 |
|
52,428 |
|
227,954 |
|
221,170 |
Change in working capital: |
|
|
|
|
|
|
|
Trade and other receivables |
(17,979) |
|
2,674 |
|
(3,315) |
|
(26,180) |
Inventories |
21,987 |
|
(7,361) |
|
68,355 |
|
(101,060) |
Prepaid expenses |
1,933 |
|
1,830 |
|
(3,340) |
|
1,100 |
Trade payables and other liabilities |
4,094 |
|
(7,854) |
|
(13,909) |
|
10,589 |
Contract liabilities |
721 |
|
2,461 |
|
(1,143) |
|
(882) |
|
|
|
|
|
|
|
|
Employee defined benefit plan contributions |
(7) |
|
(237) |
|
(2,315) |
|
(1,912) |
Income tax paid |
(13,696) |
|
(8,589) |
|
(70,476) |
|
(26,794) |
Interest received |
7,149 |
|
3,410 |
|
23,931 |
|
5,848 |
Interest paid |
(394) |
|
(1,736) |
|
(4,903) |
|
(4,310) |
Net cash from operating activities |
56,600 |
|
37,026 |
|
220,839 |
|
77,569 |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
Acquisition of property, plant and equipment - net |
(24,164) |
|
(13,833) |
|
(68,670) |
|
(49,125) |
Acquisition of intangible assets |
(4) |
|
(83) |
|
(360) |
|
(336) |
|
(24,168) |
|
(13,916) |
|
(69,030) |
|
(49,461) |
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
Payment of lease liabilities |
(285) |
|
(215) |
|
(965) |
|
(862) |
Dividends paid |
(1,436) |
|
(1,437) |
|
(5,785) |
|
(6,034) |
Dividend paid to non-controlling interests in subsidiary |
(1,862) |
|
- |
|
(1,862) |
|
- |
|
(3,583) |
|
(1,652) |
|
(8,612) |
|
(6,896) |
|
|
|
|
|
|
|
|
Change in cash and cash equivalents |
28,849 |
|
21,458 |
|
143,197 |
|
21,212 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period |
513,021 |
|
377,215 |
|
398,673 |
|
377,461 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
541,870 |
|
398,673 |
|
541,870 |
|
398,673 |
|
|
|
|
|
|
|
|
SOURCE