The management of AMG Packaging Limited has indicated that the company plans to commence previously announced factory expansion in February 2021.
“The planned expansion of our factory will commence in early 2021 as we prepare for the future,” Chairman Peter Chin said.
Though sales fell in the year ended August 31, 2020, he said the company’s management team expects that the business environment will normalise over time “”as vaccines become available to combat the [corona]virus”
For financial year 2020, sales dropped by 10 per cent when compared to the previous year, from JM$762 million to JM$720 million.
“Sales were severely affected in the third quarter but recovered somewhat in the fourth quarter,” Chin explained
Net profit after tax also fell by just under 10 per cent to JM$56 million in 2020, moving from $59 million last year.
In the meantime, Chin stated that the AMG Packaging will continue to look for ways to control costs and seek new customers to diversify its customer base.
In the management discussion and analysis in its annual report released on January 7, AMG Packaging outlined that it take advantage of its “strong cash and cash equivalents position into developing 12 Retirement Crescent”, a project which saw delays from 2020 to 2021.
The company has selected a contractor who will begin the addition of 11,370 square feet to the property in February 2021.
AMG’s balance sheet shows a cash and cash equivalents increase of 186.61 per cent, closing at US$259.3 million when compared to $90.5 million in 2019.
The increase, management said, is mainly due to the US$100,000,000 bond dated September 2019.
Accounts receivables for the period increased by 8.19 per cent as the “COVID-19 pandemic has caused everyone to tighten up on their cash flow”.
“The company, like most businesses, was affected negatively by the effects of the COVID-19 pandemic. Since we are providers of packaging, our business is highly dependent on the success of our customers in their respective markets,” he stated.
Total manufacturing costs for the year ending August 31, 2020, decreased by 9.48 per cent, moving from JM$594.32 million in 2019 to JM$538.00 million.
Total expenses for the year ending August 31, 2020, increased by 6.18 per cent, moving from JM$117.83 million in the year prior to JM$125.12 million.
“We were able to improve drastically on our manufacturing costs, which helped to increase our bottom line. We were able to achieve higher profit before tax compared to the prior year even with lower sales. Again, this was because of the improvement on the manufacturing costs,” the report outlined.