The Pact Group Holdings Ltd (ASX: PGH) share price has dropped 18% in response to its FY19 result.
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.
Pact’s Painful FY19 Result
Pact increased its revenue by 10% to $1.83 billion and EBITDA (click here to learn what EBITDA means) and EBIT before significant items fell 3% to $231 million and $148 million respectively.
Net profit after tax (NPAT) before significant items declined by 18% to $77 million. But statutory profit swung to a loss of $290 million after impairments totalling $327 million.
Pact said that its earnings were impacted by lags in recovering higher raw material and energy costs in the first half and lower volumes in some sectors.
Due to the fall in the net profit, Pact cancelled the dividend and also talked of how it improved its financing for the balance sheet, which also provides the capacity for the restructuring activities and existing growth projects.
Pact is expecting EBITDA before significant items to increase modestly in FY20, but I don’t think it’s a compelling idea at the moment, I prefer the idea of the shares in the FREE REPORT below instead.
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