Media releases

MPACT delivers a robust set of results

08 March 2024


  • Headline earnings per share up 8% to 512 cents (2022: 475 cents)
  • Net asset value per share up 11.2% to R33.63 (2022: R30.24)
  • Record cash generated from operations of R2.0 billion
  • Underlying operating profit increased by 7% to R1.3 billion (2022: R1.2 billion)
  • Total dividend per share for the year up 4% to 120 cents (2022: 115 cents)
  • Strategic projects on track

Johannesburg, 8 March 2024 – Mpact, the largest paper and plastics packaging business and recycler in Africa, delivered a resilient performance for the year ended 31 December 2023, reporting headline earnings per share growth of 8%, in a challenging economic environment.

Bruce Strong, Mpact Chief Executive Officer, said: “While the trading conditions were extremely difficult, we are pleased that our strategy and focus on expanding in sectors with market growth opportunities and adopting a business model aligned to the circular economy has yielded positive benefits. These have been underpinned by successful investments in new capabilities as well as alternative power and water supply infrastructure to increase our operational resilience.

The weak economy, weighed down further by load shedding and other public infrastructure failures, impacted many businesses and consumers who were already struggling because of high interest rates and a prolonged period of high inflation. The effect of reduced consumer spend was evident across many of Mpact’s businesses.

Despite the challenging environment, most of our businesses achieved improvements in underlying operating profit and good cash generation from operations. The increase in operating profit was due to improved margins compared to the previous year, which offset declines in sales volumes.

Global supply chain constraints that affected raw material sourcing in 2022 improved during the year. Input costs saw some relief around mid-year, particularly in plastic polymers, recovered paper, and pulp. However, other costs increased, such as electricity, coal, fuel, and certain imported raw materials influenced by the weakening rand. We were nevertheless able to pass on some of the cost reductions to customers during the second half of the year.

Load shedding increased to unprecedented levels during the year. Our paper mills and most converting operations have demand curtailment agreements with Eskom and our solar generation capacity and process designs allowed us to meet most of the requirements up to stage 5. Additional generators were also installed at multiple sites during the year, and our generator readiness programme was implemented throughout the business. Many of our key sites now have both solar PV and generators to enhance resilience.

During the year, we reached some key milestones in our strategic development, including significant progress in a number of capital investment projects for growth and operational resilience, and in our business portfolio optimisation. Another 6.7MWp of solar PV capacity was added, bringing the Group’s total solar capacity to approximately 16MWp. Other projects such as the Mpact Plastic Containers’ (Bins & Crates) Castleview factory expansion and upgrades to the Gqeberha Paper Converting factory and Mkhondo Paper Mill are on track to meet the targeted financial returns.

Group revenue from continuing operations for the year ended 31 December 2023 increased by 3.6% compared to the prior year to R12.8 billion, despite sales volumes decreasing by 10.7%.

The Group achieved record cash generated from operations of R2.0 billion (2022: R1.0 billion). Underlying operating profit increased to R1.21 billion (2022: R1.16 billion) primarily as a result of a recovery in margins, and some of the recently completed projects.


Paper business

Paper business revenue increased by 3.3% compared to the prior year to R10.7 billion (2022: R10.3 billion), due to higher selling prices which were partly offset by an 11.2% reduction in sales volumes. Volumes were negatively affected by subdued consumer demand, lower fruit exports due to adverse weather conditions, and customers’ overstocking with imported containerboard and cartonboard ordered in 2022 when there were shortages, but only delivered during 2023.

Underlying operating profit for the year of R1.2 billion (2022: R1.1 billion) increased by 5.3% compared to the prior year. The increase in profitability is attributable to improved margins and operational performance, partly offset by lower sales and production volumes.

The Felixton Mill and Mbombela Corrugated upgrade projects were successfully completed during the second half of the year following planned downtime for their implementation, which reduced profits compared to the prior year by approximately R60 million, in-line with the project plans.

Plastics business

Revenue in the Plastics business of R2.2 billion (2022: R2.0 billion) increased by 5.9%. Sales volumes declined by 3.8% on the prior year with improved volumes in Bins & Crates and FMCG offset by a decline in Preforms & Closures. Higher sales volumes in Bins & Crates were underpinned by recent investments while FMCG increased its market share.

Underlying operating profit of R189 million (2022: R198 million) decreased by 4.5% compared to the prior year with increases in FMCG and Preforms & Closures offset by a significant decline in Bins & Crates.

Preforms & Closures goodwill was impaired by R92 million due to a customer contract expiring which may affect future profitability.


Consumer spending and the broader South African economy are expected to remain constrained for the foreseeable future, with the upcoming national elections adding another level of uncertainty to our operating environment. This will put pressure on demand and the margins of our South African consumer-focused products.

The outlook for the South African fruit sector has improved compared to last year attributable mostly to more favourable climatic conditions and investments for growth by fruit producers. Their packaging demand will however depend on their ability to get produce through the ports and shipped timeously. Port constraints remain a concern for most sectors of the economy.

As containerboard customers’ stocks normalise, sales are expected to better reflect actual consumption compared to last year, but the benefits of higher volumes will be offset by lower prices due to an oversupply of containerboard globally. We will continue to manage our capacity to avoid locking up cash in stock if market conditions require.

The substantial recent capital investments made to increase efficiency, enhance operational resilience and output, and improve quality are expected to contribute positively to future profitability in both the Paper and Plastics businesses. In addition, we expect a significant improvement in the Bins & Crates business during 2024, which is expected to be partly offset by lower sales in Preform & Closures.

Strong concluded: “We remain confident in our value-enhancing strategy and committed to executing it. The strategy prioritises growth sectors and investments in innovative, higher margin and sustainable products, some of which are somewhat insulated from South African consumer spending patterns.

Issued on behalf of:

Mpact Limited
Bruce Strong, Chief Executive Officer
Tel: +2711 994-5508

Compiled and released by:

Keyter Rech Investor Solutions
Marlize Keyter
Tel: 083 701 2021