Improved plastics business performance lifts Mpact’s FY results

Paper and plastic packaging manufacturer Mpact on Wednesday reported basic earnings a share of 366.9c for the year ended December 31, compared with 259.1c the year before.

Group revenue increased 10.8% to R9.5-billion, while underlying operating profit increased 21% to R909-million, with the operating profit margin having increased to 9.5% from 8.7% in the prior year.

“These results reflect the strong improvement in the plastics business on the back of good volume growth, cost containment and the restructure of the fast-moving consumer goods (FMCG) business in 2014, while the paper business delivered steady growth underpinned by increased sales to the fruit sector,” commented Mpact CEO Bruce Strong.

Revenue in the paper business increased 11.8% to R7-billion, with increased sales volumes to the fruit sector partially offset by lower external sales of recovered fibre and exports.

The business’ underlying operating profit increased 13% to R803-million, while the underlying operating margin improved marginally from 11.3% to 11.4% for the year under review.

Revenue in the plastics business increased 8.1% to R2.5-billion, with good volume growth mainly attributable to fruit packaging, bulk bins and beverage preforms, offset by lower average selling prices, which reflected lower polymer prices.

The FMCG business delivered an improved result following its restructuring in 2014. Underlying operating profit increased 50.8% to R199-million and the underlying operating profit margin improved to 7.9% from 5.6% in the prior year.

Meanwhile, the new R350-million recycled polyethylene-terephthalate (PET) operation, which formed part of the group’s recently established Mpact Polymers business, was commissioned on time and within budget.

The company in February secured approval from the Coca-Cola Company for use of Savuka PET in the bottling of their brands.