Orora (ASX: ORA) likely to witness volume growth from exports to China from FY25 onwards

Highlights

• Orora offers global packaging solutions through its three business segments-- Saverglass, Orora Packaging Solutions (OPS) and Orora Beverage
• In 1HFY24, the company recorded 19% YoY rise in its underlying EBITDA
• Allan Gray Australia Pty Ltd has highest stake in the company with a shareholding of 9.36%

Orora Limited (ASX: ORA) is an ASX-listed international packaging manufacturer, distributor and visual communication solutions group. The company offers an extensive range of tailored packaging solutions and displays through its three businesses segments-- Saverglass, Orora Packaging Solutions (OPS) and Orora Beverage.

In the first half of the financial year 2024 (1HFY24), underlying EBITDA of the firm jumped 19% YoY to AUD 268.90 million, despite registering a 5.54% YoY decrease in revenue at AUD 2,139.10 million, underpinned by a challenging macroeconomic environment. During the reported period, underlying NPAT increased by 0.46% YoY to AUD 108.60 million.

On 1 December 2023, the company concluded the acquisition of Saverglass for a cash consideration of AUD 2158.8 million, inclusive of the locked box working capital adjustment mechanism and acquired cash on hand.

Top 10 shareholders of ORA

The top 10 shareholders of ORA have around 44.89% shareholding in the company, while the top four have 26.51% of the shareholding. Allan Gray Australia Pty Ltd and Perpetual Ltd. have the highest stake in the company with a shareholding of around 9.36% and 6.36%, respectively.

Recent business update

On 24 May 2024, the company notified that Allan Gray Australia Pty Ltd and its associated firms increased their holdings in the firm to 9.36% from 8.28%, as of 22 May 2024.

Outlook

In FY24, the company expects to deliver EBIT of AUD 307-317 million, excluding earnings contribution from Saverglass, compared to AUD 320.5 million in the previous corresponding period.

In 2HFY24, the company anticipates revenue to decrease by 3% annually for OPS and EBIT is expected to fall in the range of USD 102-107 million in FY24.

In 2HFY24, the company expects to see a fall in estimated sales tonnage for Saverglass. The revised sales forecast is 11% less compared to previous corresponding period.

Volume growth from exports to China is forecasted from FY25.

Share performance of ORA

ORA shares closed 0.511% lower at AUD 1.945 apiece on 17 June 2024 with a market cap of AUD 2.75 billion. In the last one year, ORA’s share price has declined by nearly 35.15%, and in the last three months, it has dropped by around 24.90%.

The 52-week high of ORA is AUD 3.672, recorded on 17 August 2024, while the 52-week low is AUD 1.923, recorded on 14 June 2024.

ORA Daily Technical Chart, Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 17 June 2024. The reference data in this report has been partly sourced from REFINITIV.

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