Avior Capital Markets - Mpact Ltd (185H) Mpact | Settling into new realities

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Avior Capital Markets

Mpho Mokotso

Mpact | Settling into new realities

Mpact (MPT) released a disappointing set of H1 '18 results as dHEPS declined by 10% to 30.4cps. The Plastic division recorded an operating loss for the first time since MPT listed on the JSE. The Paper division is a beneficiary of input price deflation. We expect capex projects to contribute to earnings, especially Paper, despite Old Corrugated Container (OCC) input prices normalising. While performance from Plastics should improve, we reduced our expected Group earnings recovery to account for a weaker Plastic division. We maintain our recommendation on a OUTPERFORM.

22/08/2018 11 EN

Underlying

Mpact Ltd

Mpact is engaged in the paper and plastics pakaging businesses in Southern Africa. Co. has the market position in southern Africa in recovered paper collection, corrugated packaging, recycled-based cartonboard and containerboard, Polyethylene terephthalate (PET) preforms, styrene trays, and plastic jumbo bins. The Paper business consists of three divisions: Recycling, paper manufacturing and corrugated. The Plastics business: Manufacturing a range of plastic packaging products for the food, beverage, personal care, homecare, pharmaceutical, agricultural and retail markets, primarily in South Africa.

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ZAE000156501 Johannesburg Stock Exchange South Africa

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Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Mpho Mokotso

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Mpact | Settling into new realities

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