SOUTH AFRICA – SE-listed paper, plastic and packaging group Transpaco has reported an increase in revenue by 12.5% year-on-year to US$137.22 million (R2.34-billion) for the financial year ended June 30, on the back of material cost inflation and volume growth across the group.

The company’s operating profit grew by 35.1% to US$13.06 million (R222.8 million) in the period, while net profit after tax improved by 38.4%, resulting in headline earnings increasing by 36.9% and headline earnings a share being up by 41.4%.

Cash generated from operations increased from US$11.13 million (R189.8 million) in the 2021 financial year to US$12.55 million (R214 million) for the period under review, while cash and cash equivalents at year-end totaled US$4.24 million (R72.3 million) – down from the US$4.47 million (R76.2 million) in the prior year.

Transpaco’s net interest-bearing debt-to-equity position improved to 9.3% from 15.5%.

CEO Philip Abelheim says that, despite a negative impact on sales during July and August, as customers experienced damage to stores and warehouses as a result of the July 2021 riots, Transpaco had a good start to the period.

The financial results were ahead of the company’s expectations with double-digit growth in operating profit in both the plastic, paper and board divisions.

The board has declared a final gross cash dividend of US$0.09 (R1.55) a share, resulting in total dividends of US$0.13 (R2.15) a share for the financial year – up from the US$0.09 R1.53 a share in the year prior.

The plastic division, which operates in the retail, scholastic, industrial, refuse bag, and pallet wrap markets, exceeded expectations improving operating profit by 31%, contributing 58% of group operating profit.

The paper and board division – comprising printed folded cartons, tubular cores and general packaging – experienced a 44% increase in operating profit, improving group performance by 31%.

In terms of operations, during the financial year under review, Transpaco Specialised Films successfully relocated from Bronkhorstspruit to a property held by Transpaco in Johannesburg.

In this regard, the company reports that the envisaged benefits of the combination of the Johannesburg operations of Transpaco packaging and future packaging have already been attained.

With the installation of a new multilayer extruder and high-speed bag machine, the refuse bag division added capacity to accommodate local and global market expansion.

Notwithstanding a challenging year, he says the company’s strategic business approach has proven to be resilient as Transpaco looks to continue delivering positive results while maintaining organic growth.

Owing to elevated energy prices, ongoing load-shedding, high fuel prices, interest rate increases and difficulties obtaining raw materials, Transpaco anticipates that trading circumstances will remain challenging in the financial year ahead.

Liked this article? Subscribe to our regular email newsletters with the latest news insights from Africa and the World’s packaging and printing industry. SUBSCRIBE HERE.