Amcor Ltd. (AMC.AU), the world's largest maker of plastic soft drink bottles, on Thursday reported a 13.6% drop in full-year net profit, hurt by costs associated with its early year purchase of the Alcan packaging business.

The Melbourne-based company posted net profit for the year to June 30 of A$183.0 million, down from A$211.7 million a year earlier. The earnings were damped by after tax expenses of A$226.2 million, primarily related to restructuring and the acquisition of parts of Rio Tinto Ltd.'s (RTP) Alcan Packaging unit. Excluding these charges, profit was A$409.2 million, up 13.5% from adjusted earnings a year earlier.

In a statement, Chief Executive Ken MacKenzie said Amcor was "well positioned for strong earnings growth in the 2011 financial year", driven partly by two recent acquisitions.

Macquarie Equities said the underlying profit was below the market consensus of A$418 million and just below its own forecast of A$411 million, while Goldman Sachs said was above its estimate of A$402 million.

"We remain comfortable with our (guidance for) A$594 million in fiscal 2011 net profit after tax, which is similar to consensus," Macquarie analyst Brett O'Malley said.

Revenue for the year rose 3.3% to A$9.85 billion from A$9.54 billion, and MacKenzie expects substantial synergies with Alcan.

"We remain confident of achieving A$200 million to A$250 million in synergies relating to overhead cost reductions, procurement cost savings and improved operational efficiencies," MacKenzie said. "There is no doubt this acquisition is an exciting opportunity for Amcor and one we believe will create substantial shareholder value."

On a conference call with journalists, MacKenzie forecast A$100 million-A$120 million in cost synergies on the Alcan acquisition for the upcoming financial year.

On the company's recent purchase of Ball Plastic Packaging Americas for US$280 million, MacKenzie said "significant synergy opportunities will underpin strong returns from the first full year of acquisition."

As part of the two acquisitions, Amcor said Thursday it will close four plants, including one in Australia, in an effort to cut costs and streamline its operations.

Amcor, which earns most of its revenue offshore, said the translation impact of the higher Australian dollar reduced underlying earnings by A$58 million.

The Australian dollar averaged 88.2 U.S. cents in the 12 months to the end of June 2010, an 18% increase on the 74.7 U.S. cent average the previous year, although slightly below the 89.6 cents average in 2008.

Amcor will pay a final dividend of 17 cents a share, in line with the previous year.

On its rigid plastics business, Amcor said an improved performance in Latin America offset lower volumes in North America, though it added volumes in North America have been seasonally stronger in the fourth quarter and into the start of fiscal 2011.

MacKenzie said Amcor wasn't exploring any possible debt issuance, adding "our balance sheet is in really good shape."

-By Geoffrey Rogow, Dow Jones Newswires; +61-2-8272-4686; geoffrey.rogow@dowjones.com
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