Nampak delivers ‘credible’ FY17 performance despite difficult trading environment
In light of the current macroeconomic circumstances, packaging company Nampak has delivered a “credible” financial performance for the year ended September 30, CEO André de Ruyter said on Tuesday, adding that the company had increased its trading profit by 2% to R2-billion.
He further noted during a conference call that, although Nampak’s revenue decreased by 2% year-on-year to R18.8-billion, an adjusted constant currency basis would have resulted in revenue growing by 6%, while profit would have been up by 12%.
“It was really the stronger rand that caused us to report [that] revenue [was] down slightly,” he pointed out.
Meanwhile, referring to the significant 86% decrease in earnings a share, De Ruyter explained that the drop to 36.6c apiece, although a “big number” was as a result of an abnormal, one-off capital profit of R1.3-billion on the sale and leaseback of properties in the prior year, as well as increased impairments.
“Obviously, this year, that profit could not be repeated,” he stated.
Meanwhile, De Ruyter said that while the company’s beverage can manufacturing operations achieved good results, the other divisions faced adverse conditions in a climate of reduced demand and tough trading conditions.
Economic headwinds resulted in reduced consumer spending on food characterised by lower trading volumes, product substitution and downsizing to smaller sizes.
While beverage can demand remained largely unaffected by economic challenges in South Africa and Angola, with De Ruyter calling it the “star of the business . . . where we have seen a sterling performance”, the company’s plastics business faced some challenges.
“That is predominantly related to challenges that we experienced in the UK,” he noted.
Key management changes were introduced at Plastics Europe resulting in steady progress in improving operational performance and diversifying the customer base.
“We forecast that, for the coming financial year, we will be in a break-even situation,” said De Ruyter.
Glass traded reasonably well in the first half, but lost momentum in the second half of the financial year, with irregular electricity supply from March to August having a major impact on costs. A strategy is in place to address production challenges.
“We expect the assistance of operational specialists and a high-level management intervention to result in improvements in operational efficiencies.”
South Africa is expected to remain in a tough economic and trading environment with low gross domestic product growth forecast for the next year.
In anticipation of the delayed sugar tax legislation, Nampak is working closely with major customers to assess the possible impact on their businesses and how this will change packaging requirements.
The company did not declare a dividend.
Comments
The
content
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation