Picture: MPACT
Picture: MPACT

Mpact shares plunged nearly 11% on Monday afternoon after the packaging group forecast a drop of up to 74% in its first-half headline profit.

Headline earnings per share in the six months to June are expected to be between 42.7c and 24.7c, from 95c in the previous year.

Mpact, which was unbundled from Mondi in 2011, pinned the lower financial performance on low sales volumes in the paper and plastics converting businesses.

The company also encountered lower domestic containerboard and cartonboard sales volumes and higher recovered paper costs.

"In addition, the scheduled downtime of the R765m Felixton paper mill upgrade project, which is due to be completed as planned during the second half of 2017, will result in nonrecurring additional costs and lost contribution," the company said in a statement.

The stock closed 10.61% lower at R29.50, valuing the company at about R5bn.

© Business Day

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