Mpact maintains interim dividend despite lower profits

SOUTH Africa's biggest paper and plastics packaging business and recycler Mpact maintained its interim dividend at 30 cents a share despite lower profit as it is confident of an improved performance in the second half.

- EDWARD WEST

This was according to financial director Hannes Snyman, who, along with CEO Bruce Strong, was interviewed at the release of the results for the six months to June 30.

Underlying earnings before interest, depreciation and amortisation fell by 14.5% to R625 million and operating profit lower by 25.5% to R315m. Headline earnings per share decreased to 93 cents from 128.1 cents.

Strong said the lower earnings were primarily the result of persistent and lagging demand in South Africa due to the weak macroeconomic environment, traditionally lower sales in the first half in the plastics business, and product optimisation in the PET conversion and closure plant, which had led to additional costs.

He said they continued to face a persistently challenging trading environment. The general economy remained subdued, despite lower interest rates and inflation, while uncertainty across local and global markets negatively impacted business confidence.