Nampak Gets Kick From Can Demand, But Profits Take Foreign Exchange Hit
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Erik Smuts – Nampak CEO Talks about “in 2022 we faced some operational headwinds while leveraging the available tailwinds. the sa beverage can market experienced unprecedented growth; and volumes in angola during the last quarter grew by almost 30%, exceeding our expectations.”
he added, “revenue increased by 21%, lifted by higher volumes and unusually high commodity prices. despite the strong contributions from our beverage cans and liquid paper businesses to a pleasing trading profit, an increase in foreign exchange losses, higher interest rates and increased impairments contributed to a lower net profitability.”
smuts noted that efforts to dispose of certain assets yielded no tangible results preventing nampak from reducing debt and required the extension of certain maturity dates and relaxation of covenants. nampak will approach shareholders for approval for a rights issue. he said, “with a strengthened balance sheet, we can focus on our operations to leverage growth opportunities for the benefit of our stakeholders.”
in the 2022 financial year, nampak delivered strong revenue growth of 21% (r16.9bn), underpinned by stronger volumes in our sa beverage can market, angola, nigeria and zimbabwe. despite challenging trading conditions green shoots of recovery were evident in some markets. trading profit improved 13% to r1.6bn as the pass-through pricing mechanisms in most of our businesses allowed for the recovery of increased input costs, but without the recovery of the incremental cost of funding the higher working capital, group trading margins declined to 9.5% from 10.2% in the prior year.
stringent overhead management was applied in an inflationary environment. we focused on improving our trading performance and were pleased with the strong recovery in the beverage can operations, however these were diluted by a disappointing result from divfood and the impact of the depreciation of the zimbabwe dollar on the rand-reported results of our zimbabwe operations.
cost of sales was impacted by high metals prices, due to challenging supply chains with concomitant increases in logistics and shipping costs. operating profit was assisted by a moderate 1% decrease in core employee costs, complemented by strong trading results from bevcan sa and nigeria, and a recovery in bevcan angola. our zimbabwe operations continued to perform well and remained self-funding. a once-off insurance loss of r50 million was incurred.
he added, “revenue increased by 21%, lifted by higher volumes and unusually high commodity prices. despite the strong contributions from our beverage cans and liquid paper businesses to a pleasing trading profit, an increase in foreign exchange losses, higher interest rates and increased impairments contributed to a lower net profitability.”
smuts noted that efforts to dispose of certain assets yielded no tangible results preventing nampak from reducing debt and required the extension of certain maturity dates and relaxation of covenants. nampak will approach shareholders for approval for a rights issue. he said, “with a strengthened balance sheet, we can focus on our operations to leverage growth opportunities for the benefit of our stakeholders.”
in the 2022 financial year, nampak delivered strong revenue growth of 21% (r16.9bn), underpinned by stronger volumes in our sa beverage can market, angola, nigeria and zimbabwe. despite challenging trading conditions green shoots of recovery were evident in some markets. trading profit improved 13% to r1.6bn as the pass-through pricing mechanisms in most of our businesses allowed for the recovery of increased input costs, but without the recovery of the incremental cost of funding the higher working capital, group trading margins declined to 9.5% from 10.2% in the prior year.
stringent overhead management was applied in an inflationary environment. we focused on improving our trading performance and were pleased with the strong recovery in the beverage can operations, however these were diluted by a disappointing result from divfood and the impact of the depreciation of the zimbabwe dollar on the rand-reported results of our zimbabwe operations.
cost of sales was impacted by high metals prices, due to challenging supply chains with concomitant increases in logistics and shipping costs. operating profit was assisted by a moderate 1% decrease in core employee costs, complemented by strong trading results from bevcan sa and nigeria, and a recovery in bevcan angola. our zimbabwe operations continued to perform well and remained self-funding. a once-off insurance loss of r50 million was incurred.
