By David Winning

SYDNEY--Orora's first steps as a specialist drinks packager were accompanied by signs that its Global Glass business is turning a corner as customers look to rebuild their stocks of bottles.

Orora reported a net profit from continuing operations of 200,000 Australian dollars (US$125,900) for the six months through December in its first result since completing the US$1.19 billion sale of North American packaging solutions business OPS to U.S.-based Veritiv.

Including a A$858.1 million gain from selling OPS and earnings from that business, Orora's statutory net profit for the half year totaled A$907.6 million. That compared to a A$68.2 million profit a year earlier.

Orora's sale of OPS, which completed in December, came with a pledge to lift returns to shareholders and an initial share buyback worth up to A$320 million is underway. The capital management program is on top of Orora's ordinary dividend of 5.0 cents a share declared for the half year.

The sale of OPS has increased the importance of Orora's efforts to turn around its Global Glass business, which combines the Saverglass and Gawler operations. Orora bought Saverglass from private-equity firm Carlyle Group for US$2.16 billion late in 2023, a deal that accelerated its plans to offload OPS. Saverglass, which sells enough glass to make about 700 million bottles a year, has struggled under Orora's ownership due to weak consumer demand and customers running down large stocks of premium wine bottles.

"De-stocking is continuing globally which is impacting demand," Orora said on Thursday. "However there are some recent positive indicators of improved demand with order intake in North America and Europe being the highest in two years."

Orora said it expects earnings before interest and tax for the January-June period to be broadly in line with the same period of a year earlier when discontinued operations are stripped out. Each business is likely to improve compared with its fiscal first half, the company added.

"For our Cans business we expect an improved growth rate in second-half volumes compared to the prior year," Orora said. "The focus remains on new capacity additions with Revesby commissioning and the commencement of the Rocklea expansion."

Still, Orora said potential U.S. tariffs is a risk to its guidance.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

February 12, 2025 17:12 ET (22:12 GMT)

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