Pact Group Holdings Ltd (ASX: PGH) shares have fallen 8.4% due to providing earnings guidance and announcing an impairment.
Pact is a leading provider of specialty packaging solutions in Australasia, servicing both consumer and industrial sectors. Pact specialises in the manufacture and supply of rigid plastic and metal packaging, materials handling solutions, co-manufacturing services and recycling and sustainability services.
Why Pact Shares Are Down
Pact announced it expects to recognise a non-cash impairment charge of between $310 million to $340 million after tax in the upcoming result.
It’s doing this because the company has been experiencing “challenging trading conditions” and a “moderated” long term outlook for the company’s Australia subsidiaries. The packaging Australian assets will recognise a $90 million to $100 million impairment and Goodwill will also take a $220 million to $240 million writedown.
In terms of profit guidance, the company expects to report EBITDA in the range of $230 million to $245 million.
Pact Group Executive Chairman said: “It has been a very challenging start to the year. Our results reflect significant input cost headwinds and weaker demand conditions in some sectors.”
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