SOUTH AFRICA – Nampak, a leading packaging producer, has reported a significant financial turnaround with headline earnings of R267 million (US$14.94m) for its total operations for the six months ended March 31.
This marks a substantial improvement from a headline loss of R342 million (US$19.14m) in the same period of the 2023 financial year, a testament to Nampak’s resilience and strategic initiatives.
The company recorded a loss from total operations of R93 million (US$5.20m), compared to a substantial loss of R2.49 billion (US$139.32m) in the first half of the 2023 financial year.
Nampak’s revenue from continuing operations has shown promising growth, increasing by 7% to R6.2 billion (US$346.90m) for the interim reporting period.
The company also witnessed a remarkable 133% rise in trading profit, reaching R770 million (US$43.08m), and a 201% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA), which stood at R1.148 billion (US$64.23m) for six months.
These figures reflect Nampak’s strong performance and potential for further growth.
The operating profit before net impairments from continuing operations was R1 billion (US$55.95m), up from R235 million (US$13.15m) in the comparable period of the 2023 financial year.
Operating profit from continuing operations reached R992 million (US$55.50m), starkly contrasting to the R558 million (US$31.22m) loss in the first half of the 2023 financial year.
Profit from continuing operations was R395 million (US$22.10m), compared to a loss of R878 million (US$49.13m) in 2023.
Additionally, headline earnings from continuing operations for the interim period were R447 million (US$25.01m), compared to a headline loss of R327 million (US$18.30m) in the first half of the 2023 financial year.
“These results are owing to gargantuan efforts from all at Nampak over the past 15 months,” said Nampak CEO Phil Roux during the company’s interim results presentation.
“We have achieved positive results in our transformation journey over the past 12 months. This includes a step-change in the performance of the continuing metals group, a highly effective cost reduction program, significantly lower impairment losses, improved working capital management, and pleasing progress on asset disposals.”
Despite significant macroeconomic challenges, Nampak’s South Africa Metals division performed exceptionally well due to ongoing turnaround initiatives.
The company’s core focus areas include portfolio optimization, cost reduction, and enhancing efficiencies enabled by a merged South Africa Metals business model.
Key priorities are strengthening the Nampak brand, developing a group-wide customer obsession, and building a high-performance learning culture.
The group revenue increase from continuing operations reflected encouraging growth despite an operating environment characterized by high interest rates, inflation, and consumer spending pressures.
Although DivFood and Bevcan Angola saw revenue declines, Metals recorded a 6% increase, driven by growth in Bevcan South Africa.
During the interim period, the plastics and Paper divisions increased their revenues by 9% and 10%.
Improved operating margins were achieved through portfolio optimization and cost-reduction initiatives.
Nampak also reduced net finance costs by 7% to R459 million, benefiting from the reduction in debt due to net rights issue proceeds of R960 million received in September 2023 and net cash generated during the period under review, said Nampak CFO Glenn Fullerton.
The company repaid R243 million (US$13.60m) in debt in March, expected to benefit the second half of the financial year. He said the R477 million (US$26.69m) due in September will be funded from asset disposals.
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