Zimpapers Logo

Nelson Gahadza

Senior Business Reporter

NAMPAK International Limited (Nampak) says demand across all product categories in Zimbabwe was robust, resulting in revenue and trading profits growing by double-digit figures for the year ended September 30 2021.

The South Africa and Johannesburg Stock Exchange (JSE) listed packaging products company has operations in Zimbabwe through Nampak Zimbabwe Limited, as well as in Zambia, Tanzania, Kenya and Nigeria.

Chief executive Erik Smuts said Nampak had a successful financial year driven by the recovery of all the South African metals operations, significant growth of the Nigerian beverages can market, new customers in Zambia and continued strong demand for its products in Zimbabwe.

“The performance of Zimbabwean operations exceeded expectations and revenue was boosted in the second half of 2021 along with profitability,” Mr Smuts said in  a statement of the financial results.

He said Megapak Zimbabwe and CMB Zimbabwe, which are local units of Nampak Zimbabwe, performed well in a challenging economic environment and experienced double-digit revenue growth.

“Market demand was serviced to the extent that foreign currency was available and raw materials could be sourced.

“These operations continue to self-fund their operational and capital requirements while cash generated is reinvested into operations and equipment to limit exposure to currency fluctuations,” said Smuts.

Group revenue for the year under review increased by 24 percent to R14 billion from R11,27 billion recorded in the same period last year driven by strong results from the metals division. The company has three operating divisions namely metal, plastic and paper.

Revenue from the metals division grew by 26 percent to R9,9 billion while trading profit was up by 159 percent, benefiting greatly from the turnaround at DivFood and significant improvements in profitability at Bevcan South African and Nigeria.

The plastic division revenue increased by 21 percent to R3 billion, driven by strong demand in Zimbabwe and the recovery of the South African businesses while trading profit doubled to R287 million and boosted trading margins from 5,7 percent to 9,6 percent.

Revenue for the paper division was up 9 percent despite the inclusion of Cartons Nigeria for three months in the prior year while after excluding the disposal, growth was much stronger as pandemic restrictions eased in most of our markets and trading conditions improved, leading to trading profit growth of 18 percent.

“The volumes from Zimbabwean operations grew materially, demand for cartons in Zambia recovered, although volumes in Malawi and Kenya were negatively impacted,” Smuts said.

He noted that transfers from Zimbabwe were boosted by repayments totalling R57 million, approximately, US$4,0 million from the Reserve Bank of Zimbabwe, related to historical debt..