African operations boost Nampak's first-half results

Nampak [JSE:NPK], Africa’s largest packaging company, on Wednesday posted a 2% revenue increase to R8.8bn in earnings for the six months to end-March 2018.

The group - with interests in plastics, paper and can products - increased trading profit by 7% due to high demand in the performance of the metals and plastics division on the African continent, where it has a presence in 10 countries. 

Nampak CEO André de Ruyter said the group delivered a “satisfactory performance under adverse conditions, characterised by reduced demand, particularly prior to December 2017”.

Headline earnings per share were 132 cents, up from 119.7c.

The metals division recorded a 5% jump in revenue due to robust demand in South Africa and Nigeria.

According to the company, revenue for the plastics division for the six months was flat, while strong growth in the rest of Africa contributed significantly to overall margin improvement.

Nampak is in the process of offloading its loss-making glass packaging business, and expects the deal to be finalised by the first half of next year. The division suffered a trading loss of R55m. 

Operations in the rest of Africa were said to have been negatively affected by the stronger rand, but the region is anticipated to benefit from improved economic prospects in the economies of Angola and Nigeria, and a demand for packaging products in Zimbabwe.

Nampak Plastics Europe was impacted by lower volumes, recording an operating loss of 72% to R11m. The firm expects the division to return to profitability by the end of the financial year, one year earlier than previously expected.