Astrapak earnings may fall by up to 72%

This means earnings per share will be between 7c and 12c‚ from 24.9c last year. Continuing operations are expected to plummet between 64% and 84% in the period.

This will result in an anticipated earnings from continuing operations of between 8.9c and 20c from 55.5c last year‚ while the earnings loss from discontinued operations are expected to be between 54% and 74% lower in the period. That is an anticipated loss of between 8c and 14.1c per share.

The group said on Wednesday (10 April) that in addition to difficult trading conditions‚ the fire at its East Rand Plastics factory in Brakpan and associated write-offs hit both revenue and profit.

"While all possible mitigating actions - which include outsourcing‚ inter-group production and the re-commissioning of certain mothballed equipment - have been implemented by the business‚ unfortunately force majeure had to be declared in terms of certain customers and markets‚" the group said.

"Due to the consequent reduction in turnover‚ the cost base of the business has also been reduced," it added.

Astrapak also said the insurance assessment process in respect of the fire had been completed and interim payments would now be made to the company on a regular basis.

It said all assets damaged by the fire had been fully impaired‚ and all destroyed and damaged stock‚ increased costs and loss of profits relating to the blaze earlier this year were fully accounted for.

The group said it had raised certain provisions in this regard.

"It is Astrapak's intent to use the insurance proceeds to acquire new plant to replace the items and restor lost revenue and margins‚ as and when the company identifies suitable market opportunities to achieve this‚" it said.

This would be in addition to investment budgeted for in the ordinary course of business.

In line with its strategic interests‚ Astrapak also said further rationalisation of customers‚ markets‚ production equipment and facilities had caused further impairments of existing assets and had increased costs.

Astrapak said it had completed its re-organisation of operations into divisional units and this would allow the group to benefit from its national footprint‚ with synergies across customers‚ technologies‚ procurement and supply chains.