JOHANNESBURG (Reuters) - South African packaging company Mpact on Thursday reported a four-fold increase in underlying earnings after the company was spun out of Mondi Group.
Underlying earnings per share for the year to end-December were up to 102.9 cents from 24.3 cents 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 40 cents per share was declared.
Mpact, which represented roughly 10 percent of Mondi's operating profit, was listed separately in July last year and now has a market capitalisation of more than 2.4 billion rand.
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 percent 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 warned.
Mpact's shares have shed 1.27 percent this year to date, underperforming the JSE's All Share index, which has gained 6.40 percent so far this year.
Source: http://news.yahoo.com/africas-mpact-earnings-leap-declares-dividend-071253001.html
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