AMG factory expansion set for February
DESPITE the novel coronavirus pandemic impacting the operations of some of AMG Packaging and Paper Company’s clients, plus slowing revenue growth in the 2020 financial year (FY), the company will be starting its long- desired expansion of its factory space.
This expansion will add an additional 11,370 square feet to the operations.
AMG had purchased a building at 12 Retirement Crescent Road and secured a $100-million bond through Proven Wealth Limited in an effort to increase efficiency and improve competitiveness. The expansion was pushed back by nearly a year as AMG focused on navigating itself through the murky waters which affected many businesses and led to a 5 per cent reduction in revenue to $720.5 million.
However, the significant reduction in cost of sales led to the company’s gross profit increasing by 8 per cent to $189.5 million.
Despite these improvements on the top line, increased impairment provisions and other expenses resulted in costs growing by 16 per cent to $128.7 million, which left the operating profit 6 per cent lower at $60.8 million.
AMG recorded a net finance gain of $642,517 mainly due to a $5.6-million gain on its $138.3-million US dollar-denominated cash holdings. After a slightly higher tax charge, AMG’S net profit came out 5 per cent lower at $56.2 million, with earnings per share of $0.11.
Total assets for the company increased by 15 per cent to $821.3 million, which was underpinned by the 187 per cent increase in cash and cash equivalents that stood at $259.3 million.
Total liabilities grew by 30 per cent to $272.6 million while shareholders’ equity rose by 9 per cent $548.7 million, which also factored in a $10.2-million dividend payment during the year.
Even with only 6 months remaining for the company’s 50 per cent tax remission as a junior market company, AMG’S Chairman Peter Chin is confident that the company will be able to drum up new business and secure new product lines as well.
“Our future expectation is that the business environment will gradually normalise as vaccines become available to combat the virus. This will also lead to the return of normalcy in our business. In the meantime, the company continues to look for ways to control costs and seek new customers to diversify its customer base. The planned expansion of our factory will commence in early 2021 as we prepare for the future.”