Mpact shares soared 7.35% to R31.24 yesterday after it said earnings before interest and tax (Ebit) were expected to increase by about 23% in the year to December 31, compared to the prior year’s R948 million.
The paper and plastic packaging group said in a trading statement yesterday that revenue of continuing operations had increased by about 7% to R12.4 billion.
Excluding revenue relating to the Baywhite distribution agreement with Mondi that terminated at the end of December, 2021 group revenue increased 15% and sales volumes by 6%.
In the paper business, good demand in containerboard and cartonboard continued in 2022 and higher sales volumes were experienced in the paper-converting business.
Selling prices in the paper business increased in the last quarter to recover higher input costs.
In the plastics business, sales volumes were similar to the prior year at the fast-moving consumer goods (FMCG) business, which was negatively affected by seven days of downtime at the Pinetown factory due to the floods in KwaZulu-Natal, and lower demand from customers.
Mpact recently announced a R1.2bn investment in its Mkhondo paper mill to meet growing virgin containerboard demand for fresh produce packaging, driven by growth in the South African export fruit sector.
This follows the development of Mpact plastic containers new Castleview production, and the Brits recycling facilities; as well as Mpact corrugated’s new customer service centre in Limpopo, Mpact recycling’s new facility in KZN and the expansion of its solar generation capacity at a further five plants in 2022.
Full results are expected to be released on March 7.
BUSINESS REPORT