ASX 200 shares are showing signs of a V-shaped recovery with the benchmark S&P/ASX 200 Index (ASX: XJO) climbing 57 basis points this past week.
To further illustrate, the Ishares Core S&P/ASX 200 ETF (ASX: IOZ) has climbed more than 1% during this time, as investors throw support behind the large end of the market once more.
In amongst the noise, there is a little-covered ASX 200 share that released its half-yearly results today and investors are piling in as a result.
At the time of writing, the Orora Ltd (ASX: ORA) share price is up 7.7% to fetch $3.57 on the back of its results for the half year ended 31 December 2021.
Orora touts itself as a leading sustainable packaging and visual solutions provider. It has a foothold in the design and manufacture of packaging products such as glass bottles, beverage cans, corrugated boxes, recycled paper, multi-walled paper bags, and point of purchase displays.
But this ASX 200 share isn't a small enterprise. At last check, it had a market cap of more than $3 billion and trades on a 4.2% trailing dividend yield.
Orora share price jumps as NPAT, EPS spike in 1H FY22
The company announced several investment highlights in its earnings release today, including:
- Underlying earnings per share (EPS) came in at 11.8 cents per share, up 22.9% year on year
- Underlying net profit after tax (NPAT), before significant items, was $102.7 million, up 12.9% year on year (13.6% on a constant currency basis)
- Sales revenue was $1.98 billion, up 9.6% on the previous year (10.6% on a constant currency basis).
- Underlying earnings before interest and tax (EBIT) was $154.5 million, up 10.4%
- Operating cash flow came in at $145.5 million with cash conversion at 75%
- Return on average funds employed (RoAFE) was 24.8%, up from 21.4% year on year.
What else happened for Orora this period?
The Group reported an increase in underlying NPAT and EBIT with the bottom line growing by 23% from the same time last year.
Orora says this demonstrates the "continued strength of the Group's diversified packaging assets and sustainable earnings".
Investors might recall that back in October 2021, Orora announced a $150 million on-market buyback. Today's release notes, as at 31 December 2021, the buyback is approximately 20% complete.
As a result, 9.3 million shares were bought at an average price of $3.37 per share for total consideration of $31.5 million, the company notes. According to the announcement, the buyback is forecast to be completed during 2022.
The company was also pleased with its Australasian business during the half. It says it largely avoided the impacts of Chinese wine tariffs, noting that "100% of this capacity [is] now redeployed to new product categories".
Orora also claims it is on track to achieve its "2025 goal of 60% recycled content in the glass packaging it manufactures".
It also says it is "well on track to achieving a 40% reduction in greenhouse gas emissions for Scope 1 and 2 by 2035 through a range of initiatives which include alternative furnace technologies".
Management commentary
Speaking on the announcement, Orora Managing Director and CEO Brian Lowe said:
I am pleased to report that Orora delivered a strong result for the first half of the fiscal year 2022. Our performance reflects the unwavering focus of our team on executing our strategic priorities in the context of a global pandemic. The Group reported an increase in underlying net profit after tax and underlying EBIT on the prior corresponding period, demonstrating the continued strength of the Group's diversified packaging assets and sustainable earnings. Our North American business produced another outstanding result in the first half, continuing to drive improvements in operating and financial performance, exercising pricing discipline in a higher inflation operating environment and delivering strong earnings growth in both the manufacturing and distribution OPS businesses.
What's next for Orora?
The company is forecasting FY22 EBIT to be higher than the full-year result of FY21. In its Australasia business, "EBIT growth is expected for the Beverage business in 2H22, with FY22 EBIT to be broadly in line with FY21".
Whereas in North America, "with sustained improvement in the performance of both OPS and OV, we expect 2H22 EBIT to be up on the [prior year] with continued strong earnings growth for the full year", it said.
Orora share price snapshot
Orora shares have climbed almost 28% in the last 12 months and are up another 2% this year to date.
In fact, the company's shares are in the green across all time frames, unlike the benchmark indices.
