“The strike action during the month of July 2014 had a damaging impact on the group and the related labour unrest, which was not limited to Astrapak or the industry, was amongst the worst that the group has experienced with all of Astrapak’s converting operations being affected and the majority unable to function for almost the entire month,” said the plastics packaging group [DATA APK:Astrapak Limited] in a statement.
“As detailed in the press, the wage settlement situation is still not yet fully resolved.”
(READ MORE: S.Africa enters a season of rolling strikes)
For the six months ended 30 August 2014, the company expects to report a loss in earnings per share (EPS) of between 42 and 44 cents, compared to a restated loss per share 23.4 cents for the 2013 financial period.
HEPS are set to be a loss of between 33 and 33.3 cents compared to a restated loss of 1.5 cents for 2013.
The company’s profitability was impacted by a loss of sales, productive downtime, under recovery of costs and an increase in security costs.
“The direct financial cost to Astrapak associated with this strike action is provisionally estimated to be around 30 million rand. This represents an irrecoverable loss to the business,” continued the statement.
Astrapak’s management said they have implemented a number of contingency plans and have successfully engaged with all relevant parties. However, in certain instances force majeure was declared with a limited number of directly affected customers.
(READ MORE: Astrapak past phase one of turnaround strategy )
“Management will not let medium term financial return and customer satisfaction objectives be jeopardised and as a result will implement measures aimed at addressing the issues resulting from this event.”
Astrapak’s financial results are scheduled to be released on the 29 September 2014.