Land debate hits agriculture sector
The land policy debate is stifling investments into the agricultural sector, AltXlisted Master Plastics said on Tuesday.
The land policy debate is stifling investments into the agricultural sector, AltX-listed Master Plastics said on Tuesday.
Master Plastics, a manufacturer and distributor of plastic packaging and agricultural products, singled out the mooted land reform changes and the drought experienced in the Western Cape among macro-economic “headwinds” it faced in the six months to the end of August.
Master Plastics, which supplies the agricultural, food, produce, dairy and general industrial markets, was unbundled from parent company Astrapak on May 24 2017, in line with Astrapak’s strategy to become a focused rigid packaging business.
When it listed on the JSE in 2017 Master Plastics’ immediate to medium-term growth plans focused on acquisitions and organic growth through investments into specific technologies. But Master Plastics’ tenure as a separately listed entity got off to a rocky start, with the firm lamenting difficult economic conditions. The group said on Tuesday a weak economy, increasing cost of living and rising taxes slowed down trading in the six months.
A WEAK ECONOMY, INCREASING COST OF LIVING AND RISING TAXES SLOWED DOWN TRADING IN THE SIX MONTHS
Its exposure to the drought in the Western Cape, the listeria outbreak, which depressed the processed meats and spice markets, and the market’s reaction to the land policy debate, had a negative impact on investment into the agricultural sector and the exchange rate, Master Plastics said last week.
“The weaker exchange rate and the increase in the oil prices towards the end of the [six months] have resulted in further adverse movements in polymer input prices, which has also negatively impacted working capital. These factors, together with a generally weak economy, an ever-increasing cost of living and increased taxes, have resulted in a platform not conducive for trading during the first six months,” the company said.
In the six months, Master Plastics’ headline earnings fell to 8.6c a share from 12.2c the previous period, while its basic earnings were R10.1m, down from R15.6m in the corresponding period in 2017. Revenue increased 3.2% to R243.6m.