the result, which exceeded market forecasts, was underpinned by higher earnings from the beverage and fibre packaging operations in australia and gains in the us packaging distribution business. photo viki lascarispackaging company orora has shown former parent amcor a clean pair of heels, increasing net profit by 23 per cent in the decemberhalf, and has forecast higher earnings for the full year despite subdued conditions in australia.while amcor&39s net profit rose 6.7 per cent in the six months to december 31, orora, which was spun out of amcor in december 2013, reported a 23 per cent increase in net profit to 69.1 million on a 3.4 per cent increase in sales to 1.66 billion.the better than expected result was underpinned by solid growth in beverage and fibre packaging operations in australia, helped by cost savings, a 10 per cent increase in production from orora&39s new recycled paper mill at botany, and market share gains in beer cans and wine bottles.earnings also grew strongly in the north american packaging distribution business as orora moved towards being a provider of packaging solutions rather than a supplier of commoditised cardboard boxes and paper sacks.once seen as one of the weakest performers in the amcor portfolio, squeezed by import competition and rising costs, the 2 billion demerger freed up the company to pursue organic growth and acquisitions.managing director nigel garrard said the group was "actively" looking for merger and acquisition opportunities in food, pharmaceutical, health and automotive packaging in north america to extend its geographical footprint and product range and to build scale. however, orora would take a disciplined approach to acquisitions."we have identified these markets as areas with above average growth rates we believe will be stronger for longer and where we feel we have an m & a advantrage," mr garrard told analysts.mr garrard said full year earnings were expected to exceed those in 2014, underpinned by market share gains, further cost savings and productivity gains from the recycled paper mill and new contracts, but gave no detailed guidance."it is expected the group will continue to drive organic growth and deliver on the costreduction initiatives in 2015, with earnings to be higher than that reported on a pro forma basis in 2014, subject to global economic conditions," mr garrard said.orora has won a contract to supply international paper, the world&39s largest paper company, with recycled paper from the botany mill and has extended a long term beverage can contract until 2026, underpinning future volumes. it is also spending 20 million to build a new dairy sack line to service growing global demand and is rebuilding one of three glass furnaces in south australia at a cost of 30 million.mr garrard is aiming to lift return on funds employed from around 9.3 per cent in 2014 to the mid teens over the next five to six years by pursuing profitable growth in key markets. return on funds employed reached 11.2 per cent in the december half.orora declared an unfranked interim dividend of 3.5 cents a share, up from 3 cents previously. orora expects to start paying a partially franked dividend in the second half and will consider other capital management options if it does not identify new growth opportunities.
