Astrapak profits from turnaround plan

(Shutterstock)
(Shutterstock)

Cape Town - Packaging firm Astrapak [JSE:APK] on Wednesday announced a 0.8% gross profit increase to R144.4m in its interim results for the half-year to August 31 2015.

The company, which is mid-way through a five-year turnaround strategy to rightsize the business and deliver sustained profit, said the strategy continues to gain traction, with attributable profit of R20.1m and profit per share at 16.6 cents versus a comparative loss of 43.2c.

Headline loss per share fell to 6.5 cents, down from 33.1 cents. Strong operational cash generation together with proceeds from asset disposals has reduced the debt to equity ratio to 6%.

Earnings before interest, tax, depreciation and amortisation of R56.5m, up from R54.9m, were achieved on revenue from continuing operations of R637.6m. Profit from continuing operations before exceptional items was flat at R22m.

CEO Robin Moore said the results were “acceptable overall in the context of a  weak trading environment" while the firm made "pleasing progress with our cash position and debt reduction”.

Cash released from working capital of R49.4m (2014: R36.5m) helped cut net trade working capital to R105.4m. Net working capital days fell to 30 against 40 in the corresponding period.

Net debt fell to R63.6m from R307.7m as at February 28 2015.

In its trading review Astrapak said volatile dollar-based oil prices impacted the polymer market while rand weakness saw its average value for the period fall to R12.28/$ versus R10.61 in the corresponding period.

Selling prices per kilogram rose 4.5% as the mix shifted in favour of higher value business. The average selling price was R45.67 a kilogram, up from R43.70.

During the review period Astrapak sold East Rand Plastics for R96m and Cinqpet for R41.7m. It expects to conclude the sale of Knilam for about R17m by November 1 2015.

Moore said “a smaller, stronger Group is well placed to benefit from a solid contract pipeline and entrenched positioning in largely defensive market categories”.

No ordinary dividend was declared.


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