ZIMBABWE – Zimbabwe’s largest packaging manufacturer, Nampak Zimbabwe has reported a 24.7% sales volume decline during the year ended September 30, 2020 due to depressed demand.
In a trading update, the Zimbabwe Stock Exchange-listed outfit blamed the COVID-19-induced lockdown for the slide and pointed out that foreign currency shortage, high inflation and low disposable incomes were among key drawbacks.
“Despite incomes not matching the inflationary pressures, the Group’s order books are healthy. The Group remains confident of continuing sustainability.”Nampak Zimbabwe
The group’s printing and converting unit, Hunyani Paper and Packaging, saw its sales volumes decline by 28% year-on-year.
The company’s plastics and metals unit, Mega Pak, reported a 12% drop in sales volumes due to constrained consumer demand in the first half of the year.
However, Nampak said local volumes recovered in the last quarter of the year.
On the export front, Mega Pak suffered depressed demand from regional markets for its products, especially in the Democratic Republic of Congo.
At CarnuadMetalbox, sales volumes for the full year also declined by 34% compared to prior year.
According to the company, the economy is likely to continue feeling the effects of the Covid-19 virus, but with the controls currently in operation, it is hoped that these will be minimised.
“Despite incomes not matching the inflationary pressures, the Group’s order books are healthy. The Group remains confident of continuing sustainability.
“Owing to the additional accounting work necessary for regulatory compliance, including the requirement for both historical and inflation adjusted figures, there could be a delay in publishing the Group’s financial year end results,” it stated
The packaging material producer also has operations in Angola and South Africa.
In the six months period ended March 2020, the company reported a drop in revenue by 17% to R6.5billion (US$372.4m) in all its operation.
During the period, the groups operating profit fell by 68% to R287 million (US$16.4m), due to tough trading conditions, increased competition and foreign exchange movements.
Trading profit fell 39% to R633m (US$36.2m), as a result of a loss in Divfood, reduced demand in Angola and the overall beverage can market declining in South Africa.
It swung into a loss of about R2.4bn (US$137,500) from profit of R653.3m (US$37.4m) previously recorded. Headline earnings for continuing operations amounted to 7cps.
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