Orora Reports 32% NPAT Growth, $189.7m Operating Cash Flow in 1H26
Orora has reported a strong first half for FY26 with a 32% rise in underlying net profit, driven by robust volume growth in its Cans segment and improved cash flow. The company also announced a fresh $270 million on-market share buyback, signalling confidence in its ongoing growth trajectory.
- Underlying NPAT up 32.2% to $77.8 million
- Cans volume growth of 11.2% supported by capacity expansions
- Operating cash flow rises 50.9% to $189.7 million with 112.4% cash realisation
- Interim dividend maintained at 5.0 cents per share with 79% payout ratio
- New on-market buyback of up to 10% (~123 million shares) announced
Robust Financial Performance Amid Strategic Investments
Orora has delivered a robust operating result for the first half of FY26, underpinned by disciplined execution and the completion of a major capital expenditure cycle. The company reported an underlying net profit after tax (NPAT) of $77.8 million, a 32.2% increase compared to the previous corresponding period. This strong profit growth was supported by a 9.7% rise in revenue to $1.13 billion and a 14.4% increase in EBITDA to $218.2 million.
Operating cash flow surged 50.9% to $189.7 million, reflecting not only higher earnings but also improved working capital management and lower base capital expenditure. The cash realisation rate of 112.4% underscores Orora’s effective conversion of earnings into cash, a critical metric for sustaining shareholder returns and funding future growth.
Cans Segment Leads Growth with Capacity Expansion
The Cans business was the standout performer, delivering an 11.2% volume increase driven by strong demand in non-alcoholic beverage categories and a continuing substrate shift to aluminium. Recent capacity expansions, including the commissioning of Revesby Line 2 and ongoing work on Rocklea Line 3 in Queensland, have been pivotal in meeting elevated customer demand. Revenue in this segment rose 18.6% to $442.1 million, with EBITDA up 8.1% despite higher transportation and corporate costs.
Looking ahead, Orora expects volume growth in Cans to align with long-term rates of 4-6%, supported by the completion of the Rocklea expansion in late FY26. The company is also preparing for a one-off inventory build to support anticipated customer growth, signalling confidence in sustained demand.
Glass Segments Show Mixed but Improving Results
Orora’s Glass operations experienced varied outcomes. Saverglass, despite a challenging global spirits and wine market, achieved a 2.6% volume increase and a 5.9% revenue rise on a reported basis, aided by growth in tequila and vodka categories. However, EBIT was slightly down due to higher depreciation and restructuring costs related to the Le Havre F4 furnace closure and corporate restructuring. These costs, amounting to $18.9 million after tax, are expected to yield annual EBIT savings of approximately €6 million from late FY26.
Meanwhile, Gawler Glass reported stable revenue with a slight volume decline but significantly improved profitability, with EBITDA and EBIT up 54% and 94% respectively. This improvement reflects operational efficiencies from transitioning to a two-furnace operation and energy savings from the new G3 oxyfuel furnace.
Shareholder Returns and Sustainability Commitments
Orora declared an interim dividend of 5.0 cents per share, consistent with the prior period, representing a payout ratio of 79% of NPAT. The dividend remains unfranked and will be supported by a Dividend Reinvestment Plan with shares purchased on-market.
In a strong signal of confidence, Orora announced a new on-market buyback program of up to 10% of issued shares, approximately 123 million shares valued at around $270 million. This follows the completion of a prior buyback program that repurchased 8% of shares outstanding for $227.4 million.
On the sustainability front, Orora continues to progress towards ambitious greenhouse gas emissions reduction targets and increased recycled content in its products. The Glass segment is advancing towards a 68% recycled content target by FY35, while the Cans business is nearing its 80% recycled content goal by FY30, reflecting the company’s commitment to environmental responsibility alongside growth.
Outlook and Strategic Focus
Orora’s outlook for FY26 remains stable, with expected EBIT growth in the Cans segment, flat EBIT for Saverglass at the euro level, and around $30 million EBIT for Gawler. The company anticipates that higher depreciation and corporate costs will temper overall EBIT growth. Market conditions, currency fluctuations, and potential changes to US tariffs remain key variables to monitor.
With a strengthened balance sheet, ongoing cash generation, and a clear execution agenda led by CEO Brian Lowe and the new Glass leadership under Emmanuel Ladent, Orora is well positioned to navigate the evolving packaging and glass manufacturing landscape.
Bottom Line?
Orora’s strong half-year results and fresh buyback program set the stage for sustained shareholder value amid cautious market conditions.
Questions in the middle?
- How will potential changes to US tariffs impact Orora’s Glass segment profitability?
- What are the expected timelines and financial impacts of the Saverglass restructuring savings?
- How will Orora balance ongoing capital investments with shareholder returns in FY27 and beyond?
