Nampak reports 9% rise in normalised headline earnings as debt falls 30% to US$117M

SOUTHERN AFRICA – Nampak has reported a 9% increase in normalised headline earnings of continuing operations to R346 million (US$18.4 million), while debt reduced by 30% to R2.2 billion (US$117 million) from R3.1 billion a year earlier.

Normalised EBITDA fell 6% to R816 million (US$43.5 million), primarily driven by a reduction in the Diversified segment of R103 million (US$5.5 million), partially offset by a 9% increase in Beverage’s normalised EBITDA. 

Normalised headline earnings per share rose 8% to 4,131.6 cents. 

Net finance costs fell by 33% to R189 million (US$10.1 million) due to proceeds from disposals applied to reduce net debt. 

Net cash generated from operating activities increased to R256 million (US$13.6 million) from R82 million.

Beverage Segment Drives Performance

Beverage South Africa’s performance continued to improve, with a 4% increase in normalised EBITDA to R533 million (US$28.4 million). 

Beverage Angola delivered a “stellar contribution,” with normalised EBITDA up 28% to R187 million (US$10.0 million). 

The relocation of a can manufacturing line from Angola to Beverage South Africa is progressing as planned and within budget, expected to increase capacity and flexibility across pack formats. 

CEO Riaan Heyl stated that the performance was despite headwinds in Diversified, and the sustained progress was underpinned by strategic clarity, revenue growth, management discipline, and cost efficiency focus instilled during the past three years.

Diversified Segment Faces Headwinds

The Diversified segment contracted sharply due to fish and deciduous fruit supply issues, structural business losses, and disruptions from customer pack changes and related inventory management that are not expected to be repeated. 

Normalised EBITDA in Diversified fell by R103 million (US$5.5 million), driving the overall decline in group EBITDA. 

A review of Diversified was concluded, with ensuing actions being implemented. Heyl noted that the Diversified segment remains integral to the overall Nampak portfolio strategy.

Zimbabwe Disposal Progressing

The loss from discontinued operations came to R114 million (US$6.1 million), primarily due to a R136 million (US$7.2 million) impairment in Nampak Zimbabwe. 

The disposal of Nampak’s 51.43% interest in Nampak Zimbabwe is progressing with interested parties. 

Total operations’ headline earnings of R293 million (US$15.6 million) and headline earnings per share of 3,491.6 cents decreased by 47% and 48% respectively.

Outlook

The beverage category is expected to remain relatively resilient, with capacity expansion and pack format flexibility supporting Beverage South Africa’s competitiveness. 

Beverage Angola is expected to remain a growth driver, while the Diversified reset is expected to support a sustainable double-digit EBITDA margin business once completed.

The share price gained 1.25% to R484.00 on the JSE, compared to 68 cents three years ago at the start of the turnaround.

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