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Johannesburg - South African packaging company Mpact on
Thursday reported a fourfold increase in underlying earnings after the company
was spun out of Mondi [JSE:MND].
Underlying earnings per share for the year to end-December
were up to 102.9 cents from 24.3c in 2010.
The increase in earnings is due primarily to lower financing
costs and strong cash generation in the second half of the year.
A maiden cash dividend of 40c/share was declared.
Mpact, which represented roughly 10% of Mondi’s operating
profit, was listed separately in July last year and now has a market
capitalisation of more than R2.4bn.
The company producers paper for corrugated boxes,
carton board for retail packaging and rigid plastics used in bottling.
It said its plastics business performed better than its
paper unit in 2011 but the paper business continued to make up 73% of the
comapany’s revenue.
"We expect margins in the paper business to remain under
pressure as lower international paper prices and the threat of import
substitution limit our ability to fully recover cost increases, especially
energy, transport and labour," the company said.
Mpact’s shares have shed 1.27% this year to date, underperforming the JSE’s All Share [JSE:J203] index, which has gained 6.40% so far this year.
