AMG Earnings Shredded in Q2

  • For the quarter ended February 28, 2026, AMG Packaging & Paper Company Limited (AMG) earnings were reduced by 81.5% to $3.47Bn as revenues fell sharply.
  • Revenues declined 23.1% year-over-year to $190.84Mn. The decline largely reflected increased equipment downtime from mechanical issues, along with lost production time tied to the installation and commissioning of the Glue Station and Single Facer on the corrugator, constraints that ultimately hindered the company’s ability to fulfil customer orders.
  • The glue station and single facer on the corrugator are key components in corrugated board production, where the single facer forms the fluted medium by shaping the paper into corrugations and bonding it to one liner, while the glue station applies the adhesive that ensures proper adhesion between the fluted medium and linerboard
  • On the expense side, manufacturing costs fell by 22.8% to $130.55Mn, mirroring the decline in production volumes. However, it was insufficient to prevent a 24.0% gross profit decline to $60.29Mn. Meanwhile, operating expenses, including administrative costs and depreciation, edged down by 2.4%, offering only modest relief amid the operational challenges. Consequently, operating profits were down 88.7% to $2.23Mn.
  • The Q2 decline contributed to a 67.2% decline in its 6-month earnings to $14.30Mn, following a weaker Q1 performance due to the impact of Hurricane Melissa, which resulted in reduced production days.
  • Looking ahead, the company is positioning to realise the benefits of its upgraded corrugator line, which should streamline production processes and drive greater operational efficiency, ultimately supporting earnings growth. In addition, given AMG’s core focus on industrial packaging, continued expansion in packaging for the consumer staples sector is expected to translate into stronger packaging demand, auguring well for AMG’s performance.
  • AMG’s stock price has decreased by 17.6% since the start of the calendar year. The stock closed Wednesday’s trading session at $1.82 and currently trades at a P/E of 14.0x, which is below the Junior Market Manufacturing Sector Average of 25.2x.

(Source: JSE& NCBCM research)