Overcapacity for some of its products weighed on the packaging group, which took write-downs of R1.3bn in the year to end-December
Mpact said on Wednesday that it took write-downs that represent more than half of its market capitalisation in the year to end-December, as it battled with the effects of load-shedding and global oversupply of the material that is used to make corrugated boxes.
The group swung into a loss of R880.4m from a profit of R317m previously. Accounting changes, which bring leases on to the balance sheet, decreased pre-tax profit by R33m. The group said its paper mills took commercial downtime equating to approximately 10% of their annual capacity. “The global oversupply of containerboard and cartonboard persists, while we expect the dynamics supporting recycled fibre availability to continue for the remainder of the year,” he said.
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