Fin24

Astrapak earnings set to tank

2010-08-25 13:45

Johannesburg - Packaging group Astrapak [JSE:APK] advised on Wednesday that headline earnings per share (Heps) for the six months ended August from both continuing and discontinued operations are expected to be between 40% and 50% lower than that reported in the comparative period.

This will result in anticipated Heps of between 25.9c and 21.6c (2009: 43.1c).

Heps from continuing operations expected to be between 40% and 50% lower than that reported in the comparative period, which will result in anticipated HEPS of between 28.3c and 23.6c (2009: 47.1c).

Earnings per share (EPS) from both continuing and discontinued operations is expected to be between 25% and 35% lower than that reported in the comparative period, which will result in anticipated EPS of between 24.1c and 20.9c (2009: 32.1c).

EPS from continuing operations is expected to be between 40% and 50% lower than that reported in the comparative period, which will result in anticipated EPS from continuing operations of between 26.5c and 22.08c 2009: 44.2c).

In an operational review, Astrapak said that the operating environment remained challenging during the first half of the financial year with the following factors negatively impacting on the estimated trading results for the six month period to 31 August 2010:

  • Consumer markets have continued to retract, which in turn has resulted in increased competition, aggressive pricing from competitors, and pricing pressure from customers.
  • Industrial action at three of our Flexible operations, which include the largest unit within the Group, for periods of between 4 (four) and 16 (sixteen) weeks. Each of these regrettable work stoppages has now been resolved, but impacted significantly on efficiencies and operating margins within the Flexible division as a whole.

"Although sales have remained relatively stable from a volume perspective, the above factors have negatively impacted on operating margins for the period. While the position around consumers, competitors and customers is not expected to change in the short term, the group will continue to: focus on retaining and growing existing volumes; work towards the correct long term objectives; and emerge as a better business," Astrapak said.

The group's results for the six months ended 31 August 2010 are expected to be finalised and released on SENS on or about 12 October 2010.