JSE-listed packaging producer Nampak has reported a mixed performance for the six months ended March 31, with resilient growth in its beverage business offset by a sharp downturn in its diversified South African operations.

The company’s revenue decreased by 1% year-on-year to R5.6-billion. Normalised headline earnings are up by 9% year-on-year to R346-million.

Normalised earnings before interest, taxes, depreciation and amortisation (Ebitda) decreased by 6% year-on-year to R816-million, operating profit by 6% to R899-million and net finance costs by 33% to R189-million.

An amount of R493-million in cash was generated from Nampak’s operations, after R338-million was used to fund net working capital, and the net cash generated from operating activities increased to R256-million.

Significantly improved economic conditions in Angola, coupled with stronger profitability in the six months under review and a sustained positive outlook have resulted in an asset impairment loss reversal of R319-million.

Nampak CEO Riaan Heyl says the results reflected “performance resilience despite headwinds in the diversified business, with the strategic clarity, revenue growth management discipline and elevated cost efficiency focus instilled in the business during the past three years, underpinning the sustained progress in improving operational profitability, cash generation and debt reduction despite pedestrian economic growth and muted demand.”

There has been an improvement in Nampak’s beverage division in South Africa as revenue increased by 5% for the current period, while normalised Ebitda was 4% higher year-on-year at R533-million.

Stability in this division was deemed as key, with customer retention offset by the loss of can end exports after the sale of the Nampak interest in Nigeria, and also the lower exports to Zambia and Argentina, and raw material quality and supply disruptions.

The relocation of Nampak’s can manufacturing line from Angola to South Africa is progressing as scheduled and without exceeding financial limits. In this regard, capital expenditure in the current period of R239-million included R126-million, which has been set aside for the relocation to Springs, in Gauteng.

Revenue at Bevcan Angola increased by 30% to R664-million with normalised Ebitda 28% higher at R187-million. The improved contribution and outlook enabled a R319-million loss reversal for the current period. The improved outlook in Angola comes as a result of an improved economic environment, stable currency and increased consumer demand.

Nampak’s diversified business underwent a subdued performance as revenue decreased by 18% to R1.4-billion, while normalised Ebitda was 44% lower at R131-million. This is particularly owing to business losses felt within aerosols and closures, as well as fish availability and seasonal fruit dynamics having significant material impacts on packaging demand.

The company’s net debt has decreased by R1-billion from R3.9-billion assisted by cash generation and despite capital expenditure of R474-million for the past 12 months.

Discontinued operations recorded a loss of R114-million for this period, largely owing to the after-tax impact (before non-controlling interest) of a R136-million impairment linked to Nampak Zimbabwe.