The factors that negatively impacted on the interim results of the JSE-listed Mpact Group for the six months ended June 30 continue to adversely affect the group for the year ending December 31, the paper and plastics packaging group said in a statement on Monday.
These factors include lower sales of containerboard owing to certain Mpact customers acquiring their own paper mills, a higher effective tax rate, higher finance costs and losses incurred at Mpact Polymers.
The group has also initiated the closure of its plastics manufacturing operation in Zimbabwe.
Mpact expects that the charge to the income statement relating to the closure will be an after-tax amount of about R40-million.
For the year ended December 31, 2015, the Zimbabwe manufacturing operation reported a turnover of R87-million and an after-tax loss R3-million.
In light of the above factors, Mpact advised its shareholders that the company expected its basic earnings per share (EPS) and headline earnings per share (HEPS) for the year ending December 31, 2016 to be lower than the corresponding period by at least 30%, to 110.10c and 109.7c respectively, when compared with reported EPS and HEPS of 366.9c and 365.8c respectively, for the year ended December 31, 2015.