Orora experiences “soft demand” for glass

by Meg Riley

Glass bottle manufacturer Orora is experiencing a decrease in demand for its glass products, with the company downgrading its forecasted earnings for the financial year 2024 (FY24).

In an ASX announcement released on 2 April, Orora revealed that its forecast for FY24 was between $307-$317 million (excluding sales from Orora’s newly acquired company Saverglass), down from $320.5 million in the 2023 financial year (FY23).

Headquartered in Melbourne, the company manufactures and distributes packaging solutions internationally through Orora Beverage, Orora Packaging Solutions and Saverglass.

Orora’s North American business Orora Packaging Solutions (OPS) experienced continued “volume softness” in the March quarter of FY24.

“A decline in average daily sales during the February to March trading period means that management does not expect to see the normal seasonal uplift in June 2024 quarter daily sales,” the company added in its trading update.

In its Australasian operations, strong performance in cans is expected to offset the soft demand for glass. The company said it did not expect an “immediate benefit” in FY24 as a result of the removal of tariffs on Australian wine exports to China, although it does expect volume growth for the following financial year (FY25).

Saverglass showed “no noticeable improvement in forward customer demand,” in its February and March trading results, which Orora says led to an 11 percent reduction in forecast sales tonnage for the second half of FY24 compared to second half of FY23. Orora bought Saverglass for AU$2.16 billion, completing the acquisition on 1 December 2023.

Are you a Daily Wine News subscriber? If not, click here to join our mailing list. It’s free!