Mpact swings to R884.5m loss on low demand and load shedding

DURBAN – Mpact swung from a profit into an R884.5million loss during the year to the end of December on low demand for its products and load shedding.

The largest paper and plastics packaging company in southern Africa also suffered an impairment charge of R1.3billion.

The group said deteriorating market conditions resulted in the impairment, which consisted of R549m of goodwill and R742m of plant and equipment raised against the Springs and Piet Retief paper mills, as well as the trays and films business.

Chief executive Bruce Strong said trading had been very challenging across most of their businesses in the past year. “The South African economy remained weak, and business and consumer confidence have been hit hard by load shedding and uncertainty in a number of areas,” Strong said. “This had a marked effect on our customers and particularly our consumer-facing businesses. Sales volumes were under pressure across most sectors.”

Last year, the group reported a profit of R327m.