Master Plastics maintains profitability despite challenging economic environment

12th September 2017

By: Anine Kilian

Contributing Editor Online

     

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Despite revenue and cost management remaining a challenge amid difficult economic conditions, JSE-listed Master Plastics continued to benefit from emerging trends in its core defensive and niche market segments for the six months to August 31.

The company, which was unbundled from JSE-listed Astrapak at the end of May, on Tuesday said its focus on efficiencies and waste management, had enabled the group to maintain its level of profitability, as reflected in its earnings before interest, taxes, depreciation and amortisation and profit before interest and taxation margins of 11.8% and 8.8%.

Basic earnings reached R15.6-million and headline earnings R15.8-million.

Capital expenditure of R11.9-million was incurred during the period, with a further R6.6-million having been committed since. The group is currently evaluating numerous investments to support growth in its chosen markets and existing customer base.

Looking ahead, the group will continue to focus on the execution of its stated business strategy and look to invest in opportunities to enhance efficiency and in support of organic growth being led by the existing customer base.

Recent interest rate cuts may eventually result in an increase in consumer spending, which will help to further improve the level of activity within operations, the company said.

It warned, however, that the recent storms in oil-rich areas of the US have already filtered through to polymer prices and the industry has seen and been cautioned by suppliers on further potential adverse movements in polymer pricing in the event of further worldwide supply tightening.

Despite trading conditions remaining challenging owing to a weak economic outlook, the group remains confident that the exposure to more defensive market segments, and a continued focus on operational performance, will continue to support and underwrite its strategic efforts.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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