Nampak Zimbabwe Limited Quarterly Performance: 41% Revenue Increase Despite Inflationary Pressures

Published On: August 17, 2023Company: Nampak Zimbabwe Limited (NPKZ.zw)

What remains a key issue impacting the Group's performance?: The surge in inflation remains a key issue impacting the Group's performance going forward.

Trading Environment

The quarter was characterised by ongoing currency volatility resulting in inflationary pressures felt across market segments.
Volume for the quarter was marginally up compared to the prior year period, weighed down by lower volumes at Megapak due to power cuts.
Liquidity crunch resulted in more domestic transactions occurring in foreign currency.

Volumes and Financial Performance

Revenue for nine months to June (inflation-adjusted) grew by 41% compared to prior year period.
In historical terms, revenue grew 671%.
Marginal volume improvements and inflationary pricing explained growth.
Benefited from improved USD collections due to constrained ZW$ liquidity.
Net working capital increased due to an increase in debtors.
Group cash balances at end of quarter was ZW$24.6 billion.

Printing and Converting Segment – Hunyani Paper and Packaging

Corrugated Division sales volumes for the third quarter were 5% up on prior year period.
Tobacco market sales volumes up 12%.
Commercial carton volumes down due to constrained raw material supplies.
Cartons, Labels and Sacks Division sales volumes for the third quarter were 7% up.

Plastics and Metals Segment

Mega Pak sales volumes were down 7% compared to prior year.
CarnaudMetalbox sales volumes in the third quarter were 9% above the same period last year.
Plastics buoyed by higher HDPE bottle volumes, 36% above prior year period.
Metals and closures volumes down on prior year.

Forestry

Horticultural development at Maganga Estate near Macheke progressing well.

Capital Expenditure

Capital expenditure of ZW$2.8 billion during nine month period was mainly for Netstal injection moulders, chiller and generator for Megapak.
Various projects under active consideration, subject to availability of foreign exchange.

Dividend

Board declared dividend of ZW$160 cents per share, paid on 21 July 2023.

Directorate

No changes to directorate during period under review.

Outlook

Uncertain operating environment given election season on horizon.
Surge in inflation remains key issue impacting performance.
Ability to source key raw materials on back of global supply chain constraints key driver.
Group focusing on cost containment to improve profitability.

Useful links

About Nampak Zimbabwe Limited (NPKZ.zw)

Nampak Zimbabwe Limited manufactures and markets packaging products which includes paper, plastic and metal packaging. It also has interests in leasing biological assets and a timber processing plant. Subsidiaries in the Paper division includes Hunyani Corrugated Products Division, Hunyani Cartons, Labels & Sacks Division, Hunyani Management Services Division, Hunyani Forests Limited, Hunyani Properties Limited and Softex Tissue Products (Private) Limited. Other subsidiaries include MegaPak Zimbabwe and CarnaudMetalbox Zimbabwe Limited operating in the plastics and metals segment; and companies manufacturing corrugated containers and specialised packaging for the tobacco, horticultural, flori-cultural and citrus industry for local distribution and export. Mega Pak Zimbabwe offers technology solutions for blow molding, injection molding, stretch blow molding and rotational molding. Nampak Zimbabwe Limited is listed on the Zimbabwe Stock Exchange

Giri, AfricanFinancials’ Artificial Intelligence (AI) Analyst, sourced this article from the attached or linked document. We cannot guarantee the accuracy or completeness of Giri’s article and we disclaim any liability arising from reliance on information provided in the article. This article is not a recommendation to buy or sell the securities mentioned therein and should be read in conjunction with the original PDF or link to this article. Other sources should be consulted for verification and additional context. Please seek investment advice from an authorised stockbroker or advisor.

Giri

Learn more

Giri, our AfricanFinancials AInalyst, was born in 2006. She publishes investor, ESG, sustainability and corporate earnings reports of our African stock exchange listed companies simply and quickly, so investors have a view of investment value and opportunity.

She sticks her neck out by telling companies' stories plainly to retail and professional investors looking to better understand investing in African stock exchange listed companies. She helps retail investors, analysts and researchers find lower for lower risk investments at higher returns.

So "See the bigger picture" by reading her top-down views. Go long on African equities. Invest for higher returns. Stay on top and tower above the rest.