Key highlights
- Cash generated from operations increased to R448 million from R173 million
- Net debt reduced to R2.6 billion from R3.0 billion in the prior period
- Revenue from continuing operations increased by 1.1% to R5.96 billion
- EBITDA from continuing operations of R614 million and operating profit of R284 million
- Interim dividend per share of 15 cents
- Net asset value per share of R36.34
Johannesburg, 24 August 2026 – Mpact, a leading paper and plastics packaging group, reported interim results for the six months ended 30 June 2026 today. Bruce Strong, Mpact Chief Executive Officer, said: “The Group made good progress against its objectives in a challenging trading environment. The improved performance in Paper Converting and Plastics reflects the benefits of our focus on growth sectors and higher-margin sustainable products. Stronger cash generation, together with disciplined capital allocation and operational efficiency initiatives, contributed to a stronger balance sheet. Management remains focused on converting the enhanced asset base into improved earnings, cash generation and returns from recent strategic investments.”
The six months ended 30 June 2026 were characterised by subdued economic activity, weak consumer demand and low business confidence. Trading conditions deteriorated materially in the second quarter following the escalation of conflict in the Middle East, which increased fuel, freight and certain raw material costs, placing further strain on consumer spending and industrial activity.
Structural global oversupply in containerboard and cartonboard markets continues to put pressure on selling prices despite rising input costs.
Notwithstanding these headwinds, Mpact’s Paper Converting and Plastics businesses delivered volume and profitability growth, supported by progress on strategic projects in selected growth sectors and continued investment in innovative, higher-margin and sustainable products. These improvements were, however, impacted by margin pressure in Paper Manufacturing, where lower selling prices, higher input costs and increased depreciation, as a result of the capitalisation of the Mkhondo mill upgrade, weighed on profitability.
Group revenue from continuing operations increased by 1.1% to R5.96 billion, supported by higher volumes in Paper Manufacturing, Paper Converting and Plastics Bins & Crates, as well as an improved product mix in Plastics FMCG Wadeville. Gross profit increased by 3.1% to R2.35 billion, with the gross margin improving to 39.4%. EBITDA from continuing operations decreased by 4.4% to R614 million and operating profit decreased by 15.7% to R284 million.
Cash generated from operations rose to R448 million from R173 million, reducing net debt to R2.6 billion from R3.0 billion at 30 June 2025. The Group remains well within its bank covenants.
The coated cartonboard machine, BM6, at the Springs mill was closed in May 2026, while the uncoated coreboard machine, BM3, continues to operate. During the period, the Group also commenced the rationalisation of its recycling collection footprint to improve operational efficiency and reduce costs. These actions form part of Mpact’s portfolio optimisation programme, aimed at improving competitiveness, aligning capacity with market demand and enhancing returns.
Outlook
Economic activity is expected to remain stagnant, while elevated fuel, freight, polymer and other input costs are likely to continue affecting margins, supply chains and customer demand. Municipal infrastructure constraints, double-digit water and electricity tariff increases as well as an influx of imported products continues to apply further pressure.
Pricing and margins in Paper Manufacturing are therefore expected to remain under pressure in the third quarter, with any improvement in the fourth quarter dependent on the level of price increases. Both containerboard mills are fully sold, with no planned commercial downtime.
Agricultural demand remains a positive driver, supported by the medium-term outlook for citrus exports, although there may be short-term setbacks due to the flooding in the Eastern and Western Cape earlier this year. This should support demand for corrugated cartons and plastic crates. The Plastics business is expected to deliver an improved full-year result compared with the prior year, with the extent of improvement dependent on polymer price stability linked to developments in the Middle East.
At Mkhondo, the pulp mill is delivering on its throughput and quality objectives, and the sodium lignosulphonate (SLS) quality improved significantly following interventions in the first half, although market development and orders remain below initial projections. Consequently, incremental revenue is not expected to fully offset the project’s additional depreciation and interest charges in 2026.
Bruce Strong, Mpact Chief Executive Officer, said: “Mpact’s strategic focus has shifted from capital expansion to realising the full potential of its modernised asset base. Key priorities for the remainder of 2026 include optimising returns from recent investments, accelerating the commercialisation of SLS, driving efficiency improvements and advancing targeted portfolio optimisation. The Group will continue to prioritise cash generation, working capital discipline and margin improvement, while maintaining strict capital allocation principles.”
| Issued on behalf of: | Mpact Limited |
| Contact | Bruce Strong, Chief Executive Officer Hannes Snyman, Chief Financial Officer |
| Tel: | +2711 994-5508 |
| Compiled and released by: | Keyter Rech Investor Solutions |
| Contact: | Marlize Keyter |
| Tel: | 083 701 2021 |
| Email: | mkeyter@kris.co.za |
| Issue date: | 24 August 2026 |
| JSE code: | MPT |
| Website: | www.mpact.co.za |