Mpact warns of profit hit from Covid-19
The packaging group largely operated as an essential service during the lockdown, but the pandemic has had an effect on demand
Paper and plastics packaging group Mpact warned of a steep profit decline in its six months to end-June on Tuesday, as Covid-19 took its toll on consumer demand and economic activity.
All divisions within Mpact were designated essential services during the Covid-19 lockdown, although some non-essential production lines, such as those producing packaging for quick-service restaurants and alcoholic beverages, did not operate.
Covid-19 also hit demand in general, the group said, resulting in total sales revenue from continuing operations for the months of April and May 2020 declining by approximately 9% when compared to the same period in the prior year.
Total revenue for the five months ended May decreased by 3.2%, with the group warning that headline earnings per share for its six months to end-June are expected to be at least 80% lower than the prior comparative period.
In afternoon trade on Tuesday, Mpact’s share price was up 1.96% to R1.90, having fallen 26.85% so far in 2020.