Greif, Inc. (GEF) has reported a 31.45 percent plunge in profit for the quarter ended Oct. 31, 2016. The company has earned $8.50 million in the quarter, compared with $12.40 million for the same period last year. On an adjusted basis, net profit for the quarter was $38.50 million, when compared with $44.70 million in the last year period.
Revenue during the quarter went down marginally by 0.10 percent to $867.60 million from $868.50 million in the previous year period. Gross margin for the quarter expanded 180 basis points over the previous year period to 21.14 percent. Total expenses were 93.82 percent of quarterly revenues, down from 96.30 percent for the same period last year. This has led to an improvement of 248 basis points in operating margin to 6.18 percent.
Operating income for the quarter was $53.60 million, compared with $32.10 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $83.90 million compared with $64.10 million in the prior year period. At the same time, adjusted EBITDA margin improved 229 basis points in the quarter to 9.67 percent from 7.38 percent in the last year period.
Pete Watson, president and chief executive officer, stated "I am pleased with Greif's solid fourth quarter results, which conclude an improved fiscal 2016 for our company. We increased Class A earnings before special items per share1 by 11.9 percent, more than doubled free cash flow2 to $200.9 million and returned $98.7 million in dividends to our shareholders, despite the effects of a tepid global industrial economy. Our performance benefited from improved customer service, stronger operating fundamentals and systematic fiscal discipline. Our plans for 2017 include furthering our commitment to customer service, continuing to improve our underlying business and achieving our 2017 run rate commitments. This will generate greater value for our customers and shareholders."
Operating cash flow improves significantly
Greif, Inc. has generated cash of $301 million from operating activities during the year, up 45.90 percent or $94.70 million, when compared with the last year.
The company has spent $25.10 million cash to meet investing activities during the year as against cash outgo of $146.50 million in the last year. It has incurred net capital expenditure of $75.50 million on net basis during the year, down 28.30 percent or $29.80 million from year ago.
The company has spent $272.80 million cash to carry out financing activities during the year as against cash outgo of $20.10 million in the last year period.
Cash and cash equivalents stood at $103.70 million as on Oct. 31, 2016, down 2.35 percent or $2.50 million from $106.20 million on Oct. 31, 2015.
Working capital drops significantly
Greif, Inc. has witnessed a decline in the working capital over the last year. It stood at $261.10 million as at Oct. 31, 2016, down 27.77 percent or $100.40 million from $361.50 million on Oct. 31, 2015. Current ratio was at 1.40 as on Oct. 31, 2016, down from 1.56 on Oct. 31, 2015.
Debt comes down
Greif, Inc. has recorded a decline in total debt over the last one year. It stood at $1,026.20 million as on Oct. 31, 2016, down 13.59 percent or $161.40 million from $1,187.60 million on Oct. 31, 2015. Total debt was 32.34 percent of total assets as on Oct. 31, 2016, compared with 35.82 percent on Oct. 31, 2015. Debt to equity ratio was at 1.07 as on Oct. 31, 2016, down from 1.12 as on Oct. 31, 2015.
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