Plastic packaging firm Astrapak says results lower than expected

Cape Town – Plastic packaging company Astrapak Group’s results for the six months ended 31 August were lower than expected, although the operating performance in the second quarter of this year was 49% compared to the first quarter.

Revenue was up 15%, while profits increased by 25.4%.

In a statement, group CEO Robin Moore said the numbers reflect a “relatively clean result with no exceptional terms”.

“We have substantially exited all non-core businesses and surplus assets and have been eliminating the high corporate costs that we deliberately incurred in order to implement our long term strategy.”

Astrapak’s average selling price per kilogram improved by 8% to R55.27. Revenue in the six months amounted to R734.4m, while profits from operations were R27.6m.

The company’s input costs rose considerably due to a higher oil price, an increase in polymer prices and a weak and volatile rand. This had an impact on the numbers in the past six months, Moore said.

“Our raw material prices in rand have therefore been variable within shorter periods than is normally experienced.”

Astrapak’s turnaround strategy includes significant capital expenditure with the result that the group is now well invested in appropriated and current technology.

In the period under review, Astrapak closed its Johannesburg head office and established a “more suitable” company structure in Durban. This move will eliminate R30m in annualised corporate costs, which should be evident by February 2017.