Picture: MPACT
Picture: MPACT

Packaging group Mpact expects its full-year headline earnings to drop, weighed partly down by the effects of the drought that is gripping both the Western and Eastern Cape.

Mpact, which was unbundled from Mondi plc in 2011, said in a statement on Thursday that it also faced high input costs that could not be recovered through selling prices. These coincided with low consumer demand, as well as lost contribution of about R30m associated with the Felixton Mill project.

Thus, headline earnings per share (HEPS) in the year to December are expected to drop by between 30% and 36% from a year ago.

"The group is nearing the end of its extensive capital investment programme, which is anticipated to contribute to improved future earnings," the company said.

The share price was marginally firmer at R27.40 in early trade, valuing the company at R4.7bn.

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