Packaging and paper manufacturer Mpact’s earnings a share saw a substantial rise to 188.5c for the year ended December 31, 2012, up from 54.9c in 2011.

This increase, which was accompanied by a boost in underlying earnings a share from 102.9c to 191.1c, was the result of an improved trading performance and lower finance costs on the back of a substantially reduced net debt following the group’s capital restructuring prior to listing on the JSE in July 2011.

Revenue of R6.82-billion were 10.9% higher than the prior year, driven primarily by higher sales volumes across all divisions, besides Mpact’s Paperlink paper merchant business, which posted growth of 8.6% and was sold at the end of March 2011.

Volumes in continuing businesses were up 7.8% on the prior year.

Underlying operating profit, excluding that of Paperlink, of R585-million, was 11.6% higher than the comparable prior period on the back of improved productivity and cost control.

Net debt declined to R1.05-billion from R1.31-billion in 2011, while gearing was down to 29% from 35% at the end of 2011.

Revenue in the paper business was 10.3% higher than the prior period at R5.04-billion, owing primarily to good volume growth in export fruit packaging and the displacement of imported paper.

In the plastics business, revenue of R1.78-billion was 12.8% higher than that earned in 2011, of which some three percentage points were attributable to the polyethylene terephthalate tray business acquired in February, as well as to volume growth and higher average selling prices in the existing businesses.

The board declared a final gross cash dividend of 50c per ordinary share for the year.

Mpact said it expected gross domestic product and consumer demand growth to remain subdued in South Africa and anticipated continued upward pressure on input costs such as labour, transport, electricity and municipal services.

Consequently, the group expected trading conditions to remain highly competitive with the associated margin pressure.

Mpact's focus for the year ahead would be on maintaining its market positions, achieving productivity improvements and identifying new business opportunities.