Transpaco blames strike for lacklustre full-year performance
The plastics and packaging company expects earnings to fall by as much as 45%
Plastics and packaging company Transpaco said that a three-month industry strike in late 2018 was partially responsible for the decline in the company’s full-year performance.
Transpaco said on Tuesday that it expects its headline earnings per share as well as its earnings per share to fall 40%-45%, to between 179.04c and 164.34c, for the full year ended June.
“An unprecedented, prolonged, three-month plastic industry strike, which impacted Transpaco during the company’s busiest period — October, November and December — coupled with a depressed consumer environment and a stagnant economy, resulted in Transpaco’s decline in performance,” the company said.
Transpaco, which manufactures, distributes and recycles plastic and paper packaging products for sectors including retail, industrial, agriculture, mining, pharmaceutical and automotive, negotiated for employees to return to work by January 7 after its recycling unit was closed for the duration of the strike. The company will release its full-year results on August 21.
The plastic industry strike, which started last October, hurt several Transpaco operations during the group’s busiest period in 2018. Transpaco Recycling was closed for the entire three-month period.
Alongside the unfavourable consumer environment and stagnant economy, the unprecedented and protracted three-month strike also hurt the company’s performance in the six months ended December 31, 2018. In the interim period, the company’s headline earnings per share declined 33.2% while its profit slumped by 26.4%.
The National Union of Metalworkers of SA and the Metal and Electrical Workers Union in 2018 embarked on a strike at manufacturing, moulding and packaging companies across the country when wage talks deadlocked. The strike was marred by intimidation, destruction of property and violence.
Transpaco’s share price was unchanged at R17 on Tuesday. The company’s shares are down 22.73% since the beginning of 2019.