Astrapak returns to full-year profit but revenue dips after disposals

Monday, Apr 25, 2016

ASTRAPAK returned to a profit of R20.6m for the year to end-February from the previous year’s R127m loss.

It achieved this on slightly lower revenue of R1.3bn.

"Trading conditions deteriorated further in the second half, with negative political factors exacerbating an already weak currency, elevating risk and borrowing costs, and dampening consumer and business confidence," CEO Robin Moore said in Wednesday’s results statement.

During the reporting period, the plastic packaging group raised R176.6m by selling businesses it considers noncore.

The 3% drop in revenue was due to its decision to exit the polyethylene terephthalate (PET) plastic bottle market.

"If turnover is excluded from a now discontinued PET business, which was included in the comparative, then turnover is 4.8% higher than the prior year," Mr Moore said.

An unnamed "large multinational fast-moving consumer goods customer" awarded Astrapak a large contract requiring an investment of R81m in equipment.

It invested a further R124m upgrading factories, partly to overcome the power supply problems faced by South African manufacturers.

"Earlier problems with electricity outages and load shedding have diminished and thus this disruptive feature has been ameliorated," Mr Moore said.

"Due to the reorganisation and electricity saving initiatives, cost of energy and utilities increased by only 3% in 2016 while energy usage per ton converted improved."


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