Nampak’s share price plunged over 17% on Friday after it warned of steep losses for the six months to March 31 due to impairments, exchange rate related losses from other African markets and a higher interest bill.
The share closed the day 10.96% lower at 65 cents on the JSE.
The group, Africa’s largest producer of packaging in glass, paper, metals, and plastic, but which is being restructured due to high debt, and which is planning a rights issue, said in a trading statement on Friday that its headline loss per share (HLPS) was expected to be between 53 cents and 58 cents, compared to headline earnings per share (Heps) of 35.6 cents in the first half of the 2022 financial year.
The loss per share (LPS) was expected to be between 380 cents and 420 cents compared to earnings per share of 34.9 cents at the same time in 2022.
The share price traded at 61 cents on Friday morning, and as indication of the financial woes the group is facing, consider that the share regularly traded above R40 in 2015, and that it has fallen steadily from R2.75 a year ago on the same day.
Last month its CEO Erik Smuts resigned with immediate effect, and shareholders that BR spoke to at the time expressed optimism about the appointment of independent non-executive director Phildon Roux as the interim CEO.
The group said Friday that the interim losses had been mainly due to the impact of “significantly higher” net impairment losses, devaluation losses arising from Angolan and Nigerian exchange rate movements; and the impact of higher finance costs.
Regarding the plans for a capital raise from its rights offer, negotiations to conclude credit-approved term sheets for a refinancing package for the next five years were progressing, with a milestone conclusion date of June 15, 2023.
“These negotiations, together with the group’s progress in terms of the implementation of the restructuring plan, will determine the size of the required rights offer, which will be announced in due course as part of Nampak’s ongoing shareholder updates,” the group said.
There has been speculation that the rights issue may be as much as R2 billion, which would significantly exceed the group’s market capitalisation, which stood at only R504 million on Friday.
The interim results are expected to be published on May 24.
BUSINESS REPORT