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Johannesburg - Manufacturer of paper and plastics packaging Mpact [JSE:MPT] has reported diluted headline earnings per share of 186.9 cents for the year ended December 2012 from 54.2c a year ago.
Revenue of R6.8bn was up 10.9%‚ excluding Paperlink‚ while underlying operating profit grew 11.6% to R585m excluding Paperlink.
Basic underlying earnings per share increased to 191.1c from 102.9c‚ due to the improved trading performance as well as lower finance costs.
Mpact declared a final dividend of 50c per share‚ taking the total gross cash dividend for the year to 70c per share‚ up from 40c a year ago.
CEO Bruce Strong said the group delivered a commendable set of results‚ underpinned by a sound strategy and effective execution in spite of considerable challenges in the business environment.”
Strong noted that Mpact is one of many in the manufacturing sector facing modest growth in GDP‚ rising raw material input‚ operational and administered costs‚ and wage increases above the rate of inflation.
“In these conditions we have concentrated on optimising and modernising existing operations and finding new business opportunities. It is therefore pleasing that the rise in revenue of 10.9% was driven primarily by increased sales volumes across both the paper and plastics businesses. Volumes in continuing businesses were up 7.8% on the previous period‚” he said.
In Mpact’s paper business revenue was 10.3% up at R5.042m due primarily to good volume growth in export fruit packaging and the displacement of imported paper. Underlying operating profit of R562m was 10.1% higher due to improved throughput and stringent cost control. The operating profit margin of 11.2% is in line with the comparable prior period.
Revenue in the plastics business was 12.8% higher at R1.778m. About 3% revenue growth is attributable to the PET tray business acquired in February 2012 and the balance to volume growth and higher average selling prices in existing businesses. The good volume growth was underpinned by improved sales of bulk bins to the agricultural market. Underlying operating profit of R117m was 16.7% higher than the prior period.
Mpact anticipates subdued GDP growth and consumer demand for the foreseeable future and expects trading conditions to remain highly competitive with associated pressure on margin. In addition‚ Strong notes that upward pressure on input costs such as labour‚ transport‚ electricity and municipal services will continue in the coming year.
“Our focus in the year ahead will be on maintaining our market positions‚ productivity improvement and finding new business opportunities. We are confident that our strategy and our resilience positions us well in the sectors in which we operate‚” concluded Strong.
