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Business Reporter

Zimbabwe Stock Exchange (ZSE) listed company, Nampak Zimbabwe, recorded a 19 percent growth in revenue for the second quarter to March 31, 2021 driven by significant increase in volumes during the period under review.

Nampak said the three-month period was marked by volume increase despite the introduction of restrictions by the Government to contain the spread of the Covid-19 global pandemic at the beginning of the year, until April.

“The quarter showed positive growth following the benefits from the previous periods of easing the (national) lockdowns,” Nampak said in a trading update. Volumes at Hunyani Consolidated jumped 21 percent during the quarter.

“Volumes in the commercial sector grew 33 percent in the prior year led by improved demand and customer recovery. The tobacco sector was 2 percent ahead of prior year owing to some early season requirements that came through the second quarter.”

The cartons, labels and sacks division sales volumes for the second quarter were up on prior year by 8 percent, due to sales of SO bags to millers and cartons to Nestle on the back of higher local wheat crop while tobacco sales fell due to lower crop.

At Megapak, second quarter sales grew by 46 percent compared to the previous year.

Nampak said better demand in the preforms during the quarter was the major contributor, but all areas of the business grew compared to prior year.

Megapak’s exports to the Democratic Republic of Congo (DRC) remained lower, as regional economies were also negatively affected by Covid-19 pandemic. Overall, Nampak foresees exports reducing as the company’s cost base rises.

“The increase in the 40 percent retention erodes our ability to obtain sufficient foreign exchange. The group’s year end forecasts will need to be revised if all these inflationary increases continue to remain unchecked,” Nampak said.

Carnaud Metal Box’s volumes during the quarter were 10 percent ahead of the previous year. Metal volumes were 22 percent up with food can and crowns leading the recovery. Plastics performance was mixed. Nampak said the division had higher HDPE bottle volumes, which were 15 percent ahead of year.

This was offset by reduced injection closure volumes, which were 16 percent below the prior comparative period. The group invested $58,3 million on projects carried forward from the previous year.

Nampak said an agreement had been reached with ART Holdings for the disposal of its shares in Softex Tissue Products Limited. The company said the divestiture was not material to Nampak’s business operations.

 In the outlook, Nampak said the recent award of a 75 percent pay rise will impact on pricing structures and possibly on overall product demand. The company also said the 40 percent retention for exports will affect capacity to mobilize enough requisite forex. The group may revise its year end projection if inflation persists.