Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Nampak pushes metal over plastic

Nampak is trying to grow its share of the market for packaged beverages in SA by positioning its cans as an environmentally-friendly substitute.

It says the high recycle rates achieved by its Bevcan SA business give it the unique opportunity to position drinks in cans against plastic, particularly for water.

The group’s Metals business is one of the main contributors to sales and it claims strong positions in SA, Angola and Nigeria, where beverage can volumes are at a record high.

In Angola, however, volumes have been negatively affected due to the impact of the local currency devaluation on local consumption, which reduced profits from that country in the six months to end-March.

It mitigated that by cutting costs and reducing the headcount at its operation there by 20% and expects a recovery in demand over the next 12 to 18 months. That’s in line with previous trends experienced in Nigeria following the significant devaluation of the naira.

The group says it continues to optimise its portfolio in Nigeria. It sold its Nigeria Cartons business for an enterprise value of €26-million after a big customer indicated that it may not renew its contract at the end of its remaining two-year term. It plans to use the proceeds to reduce dollar-denominated debt.

Shifting out of glass

Meanwhile, negotiations on the disposal of its Glass Division are ongoing. It said a majority black-owned business had secured funding to buy the unit but the process had taken longer than expected due to the complexities of the transaction, which also needs the approval of the competition authorities.

Revenue declined by 4% to R8.45-billion in the six months to end-March due to the decline in volumes in Angola. Trading profit fell 18% to R959-million, exacerbated by cost and other pressures at its DivFood and Plastics businesses in both SA and the UK.

It reported a 2% drop in earnings per share (EPS) to 127.1c, while headline EPS were down 9% at 119.7c.

At the end of the period, its net gearing ratio had risen to 52% from 37% in September, within its 40% to 60% target range. It said the ratio of debt to equity had been negatively impacted by the currency devaluation in Zimbabwe.

Its decided not to resume dividend payments until it’s assured of the sustainability of cash transfers from its operation in Zimbabwe and the sale of its Glass business goes through.

Its shares closed 3.4% higher at R10.60.

Source: Ince Connect

Spread the love