JSE-listed Nampak planned to increase its resilience in the face of challenging conditions as it entered the second half of the financial year.

“Proactive and prudent” steps had been taken to reduce the JSE-listed group’s cost base and improve operational performance, while strengthening its balance sheet by restructuring debt, conserving cash, withholding half-year dividends and shedding noncore properties.

“We continue our focus on operational excellence and improved asset use across all of our operations. Enhancements in procurement, operations and product portfolio optimisation have delivered results to the bottom line,” said CEO André de Ruyter on Wednesday.

Despite a “pleasing” first-half performance, external macroeconomic challenges in key markets were expected to prevail for the rest of the 2016 financial year.

In line with operating in markets characterised by subdued growth and volatile currencies owing to lower commodity prices, drought and tightening global financial conditions, the company embarked on strategic cost containment measures and operational improvements.

The group’s ‘Buy Better’ programme was expected to net savings of R120-million by year-end, the ‘Make Better’ programme unlocked significant operational improvements and the ‘Sell Better’ programme delivered further inventory optimisation.

“These programmes, together with our efforts aimed at managing the impact of currency volatility and liquidity constraints on results and performance, position Nampak well to navigate the challenging economic conditions,” De Ruyter added.

Further, cash conservation and balance sheet structure improvements included a significant R1.74-billion sale and leaseback transaction that would bolster Nampak’s balance sheet and retire liabilities.

Sixteen properties, with a book value of R373-million, would be sold to Imbali Props 21, subject to competition authorities’ approvals.

Nampak would lease 14 of the properties for 15 years, with the option of renewal or repurchase, and lease one other property for a period of three years.

In addition, Nampak improved its balance sheet structure by converting R1.3-billion in short-term funding to long-term funding as at March 31, with a concomitant improvement in the group’s short-term solvency reflected in a 20% improvement in the group’s current ratio.

In light of liquidity constraints and elevated debt levels, Nampak would not declare an interim dividend.

Further, Nampak had curbed capital expenditure (capex) for the year to between R1-billion and R1.4-billion, down from the previous guidance of R1.2-billion to R1.6-billion, with new projects approved only by exception.

During the six months to March, capex amounted to R921-million, compared with the R1.2-billion spent during the same period in 2015, with the bulk of the funds relating to capital commitments made on approved projects in the prior year.

Nearly R650-million had been spent on expansion projects, while R273-million was spent on replacement projects.

Meanwhile, De Ruyter said Nampak delivered a pleasing performance during the six months to March 31.

“Nampak has delivered a strong set of results for the first half of the 2016 financial year supported by the turnaround at the glass division and a solid result from our metals divisions,” he noted.

The group’s trading profit for the half-year under review increased 17% to R989-million, and operating profit decreased 7% to R870-million, while revenue edged up 10% to R9.4-billion.

Nampak’s headline earnings per share (HEPS) from continuing operations increased by 4% to 105.2c; however, normalising for the impact of the abnormal exchange rate effects the adjusted HEPS increased 21% to 123.2c.

Basic earnings a share during the first half of the year fell 12% to 105c.