Astrapak Operational Update and Trading Statement for the six months ended 31 August 2013 ASTRAPAK LIMITED (Incorporated in the Republic of South Africa) (Registration number 1995/009169/06) Share Code: APK ISIN: ZAE000096962 Share Code: APKP ISIN: ZAE000087201 ("Astrapak") Astrapak Operational Update and Trading Statement for the six months ended 31 August 2013 Operational update In the integrated annual report for the year ended 28 February 2013, Astrapak shareholders were informed of a comprehensive review that had prioritised essential building blocks for a business improvement journey with definable productivity and return aspirations. The recovery time frame was two years, with work on immediate priorities well under way, and with optimal return objectives to be achieved within five financial years. There is encouraging operational progress to streamline the portfolio of companies. This does, however, have financial effects, associated with both continuing and discontinued operations. The effect thereof will be reflected in the result for the six month period ended 31 August 2013 and for the full financial year ending 28 February 2014. In positioning for the future, Astrapak has required structural and behavioural adaptations and stricter operational discipline; as a result, there have been substantial senior staff changes and reduction programmes have been initiated.. As human capital is fundamental to charting a new course, new blood continues to be recruited to key specialist and managerial roles. Both the reductions in headcount and the attraction of specific skills have a temporary cost implication causing a time lag before productivity improvements are realised. The statement of financial position has benefitted from the receipt of insurance proceeds arising from a devastating fire at East Rand Plastics. The fire caused severe disruption for a protracted period of time and for the six months trading period the Astrapak Flexibles segment returned a poor result, with East Rand Plastics loss making. With the finalisation of the claims process, Astrapaks Flexible segment is now in the process of being optimally positioned in line with the new group structure and strategy. This restructuring will continue through the second half of the current financial year. In light of the restructure, the carrying value of the combined asset base is continually assessed with additional impairments to property, plant and equipment taken as and when necessitated. In line with the strategy, Alex White was sold as a going-concern with effect from 1 August 2013. Packaging Consultants has been closed and is now treated as discontinued. Within the Astrapak Rigids segment, the Moulding division performed well ahead of budget for the six month period. The Johannesburg site has been rationalised with injection moulding equipment now consolidated on one site in Pinetown as part of our previously mentioned closure strategy. Efficiency benefits are already apparent. Progress has been made securing long term supply contracts within the mouldings customer base. Also within the Astrapak Rigids segment, the PET division has underperformed budget for the period due to weak seasonal demand and the effects of a facility reorganisation at a major customer. A much better second half is anticipated. Investment has been made and future volumes secured under contract. In the Forming division there is a renewed look at the manufacturing footprint with a focus on management of margin, costs and customer engagement. Trading conditions are difficult, compounded by rising polymer, electricity and labour costs, as well general market price sensitivity. But these are conditions that underscore the necessity for Astrapak to make the tough decisions and implement them for the good of all stakeholders associated in various ways with the Company. Trading statement Astrapak has guided shareholders on the recovery components and immediate objectives for the financial year ended 28 February 2014. Legacy issues are being comprehensively dealt with and the ground laid for a much firmer financial footing going forward. The Company had anticipated a reduced financial result for the six months ended 31 August 2013 as a consequence of these factors and is now in a position of reasonable certainty to confirm that the financial results shall differ by at least 20% from the previous corresponding period. Consolidated continuing turnover has increased slightly, a combination of pleasing growth at the Astrapak Rigids segment. However, substantially reduced turnover at the Astrapak Flexibles segment was delivered for reasons previously described. Profit from continuing operations before exceptional items is expected to show a decline of between 20% and 40% in comparison with the comparative six month period ended 31 August 2012. An exceptional loss in the amount of approximately R35 million shall be recognised and includes a once-off item in respect of insurance and impairments related to the discontinuation of Packaging Consultants. Net interest paid and the tax expense will reflect a reduction. As a consequence of the exceptional loss and the substantially increased loss from discontinued operations, the Company will report a net attributable loss. Earnings per ordinary share, which includes both continuing and discontinued operations, are expected to decrease by between 240% and 260% compared with the 16.9 cents reported for the six month period ended 31 August 2012 and thus reflect a loss. The loss is due to the exceptional item and the loss making discontinued operations. Earnings per ordinary share from continuing operations are expected to decrease by between 150% and 160% compared with the 21.7 cents reported for the six month period ended 31 August 2012 and thus reflect a loss. The loss is due entirely to the exceptional item. Headline earnings per ordinary share from continuing operations are expected to decrease by between 40% and 60% compared with the 22.0 cents per share reported for the six month period ended 31 August 2012 and thus reflect a profit. Despite the reduction in headline earnings per share from continuing operations the result is reasonably expected to be better than management had budgeted for. Astrapak has reflected a positive net cash flow position for the period. It is anticipated that the normal seasonal pattern of improved second half cash collection will pertain to the year. The statement of financial position as at 31 August 2013 will also reflect an improvement in the debt to equity ratio. The financial information on which this operational update and trading statement is based has not been reviewed or reported on by the Companys external auditors. Astrapaks financial results for the six months ended 31 August 2013 are scheduled to be released via the Johannesburg Stock Exchange New Services on or about Friday 27 September 2013. A results presentation is scheduled for Monday 30 September 2013 in Johannesburg and Tuesday 1 October 2013 in Cape Town. Denver 20 September 2013 Sponsor: RAND MERCHANT BANK (A division of First Rand Bank Limited) Date: 20/09/2013 12:08:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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