A specialist in moulding and plastic packaging formation technologies, Astrapak Group’s interim results from continued operations for six months reflect an increase in revenue.
The results, ended 31 August reflect an increase by 15.2 percent to R734.3 million and an increase in profit operations by 25.4 percent to R27.6 million.
Astrapak Group CEO Robin Moore describes this as a relatively clean result with no exceptional items.
‘We have substantially exited all non-core businesses and surplus assets, and have been eliminating the high corporate costs that we deliberately incurred in order to implement our long term strategy,’ he says.
Improvements, efficiencies and opportunities
The group’s new production structure is in place and its focus is to achieve top and bottom line improvements and efficiencies.
‘We are pursuing new sales opportunities, continuing to improve procurement and demand forecasting, while really driving to increase conversion ratios and improve operational performance,’ Moore enthuses.
He says the underlying profitability of continuing operations reflected an improvement by 49 percent in the second quarter, which was relative to the first quarter. This indicated a successful start of the strategy.
In spite of a weak macroeconomic backdrop, difficult trading conditions and intense competitor activity, Astrapak’s average selling price per kilogram improved by eight percent to R55.27 – a function of both mix and price recovery.
The increase in revenue of 15.2 percent to R734. 3 million is owing to improved volumes of strong relationships across a narrower but defined customer base. It is further owing to specifically commissioned new projects that have started to show commercial results during the second quarter – particularly in the moulding division where volumes were up by six percent.
Revenue generating markets
Astrapak’s three largest markets according to revenue generation are personal care and toiletries, food and automotive.
According to Moore, these markets are resistant to poor economic conditions and benefit from growing urbanisation and investment by government in bulk infrastructure and sanitation.
Astrapak is progressing with the sale of its remaining three flexibles businesses. It currently has R300.8 million as the net realisable value of assets classified as held for sale. When sold, these will strengthen the balance sheet and result in a net cash position for the group.
Moore says that the company is budgeting for a substantially better second half of the year.
‘Returns from major customer projects are beginning to reflect in results, and should accelerate. Costs are reducing and will further fall,’ he adds.