ZIMBABWE – Packaging firm, Nampak Zimbabwe Limited (Nampak), recorded a four percent increase in revenue for the six months to March 31, 2015 on the back of strong demand in focus areas.
In a statement released yesterday, company secretary Keith Nicholson, said while the group’s profit before interest and tax was up on prior year at $2,4 million, performance had been offset by weaker exports and price reductions.
Nicholson attributed the depressed performance on the export front to weakening regional currencies which were failing to compete against a strong dollar.
“Operating profit before interest and tax at $2,4 million (2015: 854 000) was up on prior period, driven by cost containment and the investment of $8,6 million in new assets, resulting in improved productivity and efficiencies,” he said, adding this represented a 3,1 percent margin versus 0,4 percent prior period.
Nampak — which spent $2,7 million in capital expenditure during the first six months is also buttressing operating capacity in its consolidated businesses.
This comes as the South African company last year consolidated its shares in three packaging firms, Hunyani Holdings (Hunyani), MegaPak and Carnaud Metalbox (Carnaud).
The group’s Carnaud Metalbox performed ahead of prior comparable period after posting a seven present increase in revenue during the half year. It maintained profitability from the full year, with the growth attributed to improved can and HDPE bottle sales.
At Hunyani, revenue was seven percent down on the same period last year attributed to reduced exports.
“Despite the revenue fall, operating profit was up on prior period as a result of overheads savings and the benefits of the staff rationalisation in prior year,” Nicholson said.
MegaPak revenue was up 14 percent as the packaging unit recorded operating profit ahead of prior period.
“This was due to improved performance volumes after additional capacity was installed last year and strong demand from the key customers,” the company secretary said.
Nampak did not declare a dividend for the six months with the secretary saying cash resources were expected to be utilised to fund future capital expenditure projects and to reduce long term debt.
This comes in the wake of a recent announcement that the packaging firm expected prevailing economic conditions and drought to affect operations this year, despite a profitable first quarter.
According to Nicholson, the firm is going to continue rationalising operations with a special emphasis on cost and cash preservation.
During the first half, Nampak appointed group financial officer Francis Dzingirai who joined the Hunyani group in 1991 — group finance director with effect from February 11 2016.