AUSTRALIAN CO AMCOR SAYS Q1 TRADING IN LINE WITH EXPECTATIONS

Australian packaging company Amcor Ltd (ASX:AMC) says its trading for the first quarter was consistent with its outlined expectations and full year earnings will depend on currency movements and the timing of the Alcan acquisition.

"Trading during the first quarter was consistent with expectations outlined at the full year results in August," managing director Ken MacKenzie told shareholders in Melbourne on Thursday.

"Volumes are generally lower than for the same time last year, however in most businesses, they appear to have stabilised at the current levels."

"At the full year results we stated that if economic conditions remained stable at current levels, earnings for the Australasian business were expected to be higher for the full year," he said.

"Given the solid start to the year, we remain confident of improved earnings."

Volumes are generally lower than for the same time last year, however in most businesses, they appear to have stabilised at the current levels, he said.

Amcor reported in August an 18.2 per cent fall in net profit to $A211.7 million (US$196.78 million) for the year to June 30 on lower underlying demand as customers reduced stocks across the supply chain.

Amcor also unveiled in August the $2.44 billion acquisition of Rio Tinto's packaging units, Alcan Packaging, which is expected boost Amcor's earnings by 40 per cent and means 85 per cent of earnings will come from offshore.

Mr MacKenzie told the annual general meeting on Thursday the deal was expected to be earnings per share accretive in the first full year of ownership, fiscal 2011.

Amcor said the full year impact on reported earnings due to the movement in the Australian dollar was uncertain.

"For the last nine months of the 2008/09 year the average exchange rate against the US dollar was approximately 70 cents and against the euro was approximately 53 cents."

"The current sensitivity in reported earnings to movements in the exchange rate is $3 million in profit after tax for every one cent movement against the US dollar and $3 million in profit after tax for every one cent movement against the euro.

"These sensitivities will increase following the completion of the Alcan Packaging acquisition."

The company said full year profit would depend on the exchange rate for these currencies over the next nine months as well as the exact timing of the closing of the Alcan Packaging acquisition.

At 1140 AEDT, Amcor shares were up nine cents or 1.6 per cent at $5.73.

(AAP)lm

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