Power outages hit NamPark volumes

Listed packaging materials manufacturer Nampak Zimbabwe says group volumes for the half-year period increased by a marginal 2 percent mainly due to power outages and working capital shortages.

During the six months period to March 31, 2023, severe power cuts were experienced at the Megapak plant in Ruwa as well as a ZESA fault that affected the Carnaud Metal Box (CMB) plant for a period of about eight weeks.

Resultantly, two of the company’s three divisions posted negative volume growth due to power cuts and faults as well as working capital problems.

Hunyani Paper and Packaging sales volumes for the period were 10 percent higher compared to the same period last year, largely driven by the tobacco sector, which was up 25 percent due to additional volume demand.

“Commercial volumes were 8 percent down on the prior year period due to reduced supply of raw materials,” group managing director Mr John Van Gend said in a statement of the financials.

In the period under review, MegaPak sales volumes came in 9 percent lower than the prior-year period due to incessant power cuts in Ruwa.

“As a result, an additional generator was procured to reduce the negative effects of the power cuts,” he said.

At Carnaud Metal Box (CMB), sales volumes for the half year were marginally down compared to the same period in 2022.

In plastics, high-density polythene was 5 percent ahead of the prior-year period due to increased demand.

Metals volumes were significantly down due to raw material shortages, particularly in the first quarter, while closure volumes were significantly up on the prior-year period due to improved demand.

Mr Van Gend said although foreign currency inflows improved over the period, the tight liquidity conditions in the economy affected the company’s ability to replenish raw materials on time.

The group’s revenue for the period under review was $44,8 billion, in hyper-inflationary terms, which is 56 percent more than the revenue recorded in the same period in 2022.

According to Mr Van Gend, trading margins were unchanged compared to the prior year as Nampak sought to remain competitive. The trading profit of $8,3 billion was 63 percent ahead of the prior year.

He said Nampak’s units continued to trade profitably, with treasury and cash flow management remaining the key focus areas.

“Networking capital for the half year increased mainly due to increases in foreign currency-denominated trade receivables and inventory as the group sought to preserve value,” Mr Van Gend added.

-herald