Mpact's dividend slashed as economic pressures persist

WITH no letup in sight for the weak economy in the short term, paper and plastics packaging group Mpact has paid out a final dividend of 30 cents, less than half of last year’s 75 cents, while it moves to close its Springs cartonboard mill.

- EDWARD WEST

MPACT's revenue in the Paper business for the 2025 financial year increased by 7.4% to R11.8 billion due to increases of 4.3% in sales volumes and 1.6% in average selling prices, and the acquisition of Seyfert in the Western.

(ANTOINE DE RAS)

CEO Bruce Strong said 2025 had been a demanding year. While overall performance was mixed, progress was made to strengthen Mpact’s position through capital investment, portfolio optimisation, and operational improvements.

Economic pressure and sustained difficult trading conditions across several of the group’s markets saw headline earnings per share fall to 307 cents in the year to December 31, down from 324 cents in 2024.

The group plans to close the Springs mill, which forms part of its Paper reporting segment, mainly due to weak markets and cheaper imports, and affecting some 377 employees. The mill is likely to run until the end of May 2026.

Strong said consumers face intense financial pressure affecting demand, while widespread municipal infrastructure shortcomings are driving additional costs across manufacturing operations. At the same time, an influx of imported products is placing strain on several domestic industries, including many of Mpact’s customers. There were few signs of any meaningful improvement in the short term, he said.

“With the bulk of our major investment cycle completed, including commissioning the Mkhondo mill upgrade, we are shifting focus to converting the asset base into stronger earnings, cash generation, and improved returns,’ said Strong.