Revenue from contracts with customers for the interim period decreased to R5.06 billion (2019: R5.13 billion) and operating profit came to R126.9 million (2019: R255.2 million). Profit attributable to equity holders of Mpact lowered to R15.4 million (2019: R68.7 million). Furthermore, headline earnings per share from total operations decreased to 8.4 cents per share (2019: 39 cents per share).

Cash dividend
The Board has resolved to preserve cash resources, given the uncertainty of the impact of the lockdown and Covid-19 pandemic. As a result, no interim dividend for the six months ended 30 June 2020 was declared. The final cash dividend of 42 cents (33.60 cents net of dividend withholding tax) per ordinary share for the year ended 31 December 2019 will be paid on 7 September 2020, in accordance with the details announced on SENS on 30 April 2020.

Company outlook
The outlook for the remainder of the financial year remains uncertain given the extent of the lockdown measures imposed by Government in an already fragile economy, coupled with ongoing power outages. There was some recovery in QSR demand in July, but the beverage and tobacco sectors remain weak. We expect good demand for fruit packaging in the second half and improved demand in other sectors as lockdown regulations are eased. While global containerboard and cartonboard prices appear to be rising off a low base, the market remains in oversupply.

Mpact's strong balance sheet and experienced management team gives us confidence that the Group will be able to navigate these challenges. Our focus will continue to be on cash preservation through strict working capital management, the postponement of non-essential capital expenditure and implementing additional cost-containment initiatives to mitigate the effects of the weak market.

Mpact's integrated business model is uniquely focused on closing the loop in paper and plastic packaging. We will continue with product innovation initiatives and work with our customers to develop new markets to ensure that our business is well positioned for any recovery.

Attachments

  • Permalink

Disclaimer

Mpact Limited published this content on 05 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2020 08:16:05 UTC