Nampak’s manufacturing sites continued to mitigate the impact of Covid-19 with additional safety measures, with lost time injury frequency improving materially to 0.27, below the company’s target of 0.35. File photo.
JSE-listed packaging manufacturing group Nampak has pointed to a turnaround in its metals division as the main driver behind a more than 100 percent growth in profit.
Nampak yesterday reported a 109 percent growth in trading profit to R1.4 billion, as revenue rose 24 percent to R14bn for the year ended September 30, 2021.
Operating profit before net impairment losses increased significantly to R1.2bn, from a loss of R283 million.
The group said these results were driven by strong growth of the Metals division, as a result of a solid performance by its beverage can operations in South Africa and Nigeria.
It said the restructuring of DivFood in South Africa also contributed significantly to the improvement in profitability.
Nampak chief executive Erik Smuts said the group was now in a better position to service customers using an improved cost base and will continue building trust with all stakeholders.
He said Nampak had a successful financial year, driven by the recovery of all the South African metals operations, significant growth of the Nigerian beverage can market, new customers in Zambia, and continued strong demand for the group’s products in Zimbabwe.
“The group successfully restructured two divisions, consolidated operations and simplified product offerings to strengthen the group’s profitability and competitiveness going forward,” he said.
However, Nampak’s manufacturing sites continued to mitigate the impact of Covid-19 with additional safety measures, with lost time injury frequency improving materially to 0.27, below the company’s target of 0.35.
Nampak’s earnings improved to R207 million from a R3.5bn loss, with earnings per share and headline earnings per share both rising more than 100 percent, to 32.1 cents and 62.3 cents, respectively.
The group management also reduced its exposure to US dollar debt and renegotiated covenants, also securing trade finance facilities to further ease covenant pressures.
“Nampak successfully renegotiated key funding agreements to reduce financial risk for the coming year and secured a R1bn non-recourse trade finance facility to further stabilise the balance sheet,” Smuts said.
For the year ahead, Smuts said Bevcan’s improved demand was expected to continue if restrictions on large events were further eased.
He said the renewal of various local long-term supply contracts during the past 12 months will secure beverage can volumes for the coming two years, while the new export contract will support can ends volumes for 2022.
“We expect improved demand in all areas of our business in the new financial year. All our operations should benefit from the easing of pandemic restrictions.”
siphelele.dludla@inl.co.za
BUSINESS REPORT ONLINE
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