In early trade the Asaleo Care Ltd (ASX: AHY) share price has climbed 2% higher to $1.49 following the release of the personal care and hygiene company's half-year results.
Here are key highlights from its first-half release:
- Revenue increased 0.5% on the prior corresponding period to $294.2 million.
- EBITDA climbed 4% to $60.9 million.
- Net profit after tax increased 4.1% to $28.2 million.
- Statutory net profit after tax was up 11% to $27.7 million.
- Earnings per share of 5.2 cents.
- Interim dividend of 4 cents per share, 50% franked.
- Outlook: Full-year guidance of low single digit growth remains unchanged.
Overall I felt this was a decent result from Asaleo Care and was pleased to see the company return to profit growth again.
Furthermore, it was good to see the company reiterate its full-year guidance of low single digit profit growth despite the challenges of higher electricity and pulp pricing and a competitive retail marketplace.
The biggest driver of the result was its Tissue segment. Although segment revenue rose just 0.7%, lower pulp pricing, significant logistics savings, and improved sales mix led to segment EBITDA increasing 18.3% to $32.7 million.
This helped offset the disappointing performance of the company's Personal Care segment. While segment revenue increased 0.2%, EBITDA slumped 8.8% to $28.2 million due largely to an increased spend on advertising and promotional activities.
Should you invest?
Based on today's result Asaleo Care's shares are changing hands at 12x earnings and provide a trailing partially franked 6.7% dividend.
Whilst this is cheap and could make Asaleo Care worth a look, I wouldn't be in a rush to make an investment just yet. I'd rather hold out and see how the business performs in the second-half before making an investment.
In the meantime investors might want to take a look at the sellers of its products such as Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) instead.
