JOHANNESBURG - Nampak, Africa’s largest packaging manufacturer, posted a 3percent hike in group trading profit, helped by the strong performance of the metals division in South Africa and Angola in the year ended September.
Nampak chief executive André de Ruyter said in a statement yesterday that the JSE company's performance had been resilient in a turbulent economic and political environment.
“While our beverage can-making operations achieved good results, the other divisions faced adverse conditions in a climate of reduced demand and tough trading conditions. Our results have also been negatively impacted by a number of significant abnormal items,” he said. De Ruyter was referring to earnings a share plummeting 86percent to 36.6cents per share.
The company said the greatest impact of the “abnormal items” was the absence of a once-off capital profit of R1.3billion made on the sale and leaseback of properties in South Africa last year and increased impairments.
Declined
Headline earnings and headline earnings per share for the year increased 16percent and 15percent in the period to R793million from R681m in 2016 and 123.8c, compared with 107.6c last year, respectively.
However, revenue declined 2percent, impacted by the strengthening of the rand against the majority of foreign currencies.
“Economic headwinds resulted in reduced consumer spending on food characterised by trading down to more affordable staples, product substitution for value and house brands, as well as downsizing to smaller pack sizes,” De Ruyter said, adding that beverage can demand remained largely unaffected by economic challenges in South Africa and Angola.
Cost management and operations excellence were prioritised in the period, resulting in a R57m cut in head office costs.
The company said its newly established capital assurance committee contained capital expenditure for the year to R735m, 27percent less than the average R1bn envisaged, due to prudent capital allocation.