Nampak sits on ‘significant capital projects’

PACKAGING firm, Nampak Zimbabwe Limited, is waiting to generate funds for “significant capital projects” that will help upscale its business, the company has said.

In a statement attached to its financial results for the year ended September 30, 2023, Nampak Zimbabwe Limited group managing director John Van Gend said capital expenditure amounted to ZWL$13,14 billion during the period, from 2022’s comparative of ZWL$12,44 billion.

Capacity and plant service projects dominated this spending.

Nampak Zimbabwe Limited has three main business segments — paper, plastics and metals.

“There are some significant capital projects currently being reviewed by management and should funds become available, it is our intention to implement them,” Van Gend said.

The company was, however, liquid with ZWL$2,30 per dollar of short debt, indicating it could cover some capital projects.

This is because trade and other receivables — money the company’s customers owe — rose 76,36%.

“The 2023 trading year saw a lot of complexities in the operating environment particularly around currency, inflation and power shortages. We, however, noted some volume growth and improved demand despite these challenges,” Van Gend said.

These complexities saw total expenses grow by nearly 48% to ZWL461,73 billion from the 2022 comparative.

“The group will continue to focus on cost control and margin preservation in order to meet these challenges,” Van Gend said.

He said with the El Nino drought impairing the agricultural season, the plastic and paper segments would be affected.

The segment bottles and packages mainly agricultural products.

Meanwhile, the firm benefitted from volume growth as well as management’s focus on cost containment and operational efficiency.

Van Gend said the firm sought new opportunities to improve both product offerings and quality and continued to invest in them.

“The group achieved sales for the year in inflation adjusted terms of ZWL$573,78 billion (2022: ZWL$394,15 billion) and a hyperinflated trading income of ZWL$114,56 billion (2022: ZWL$83,47 billion),” he said.

Under its paper segment, sales volumes improved by 13,4% compared to the prior year due to firm demand for tobacco cartons.

For its plastics and metals segment, sales volumes decreased by 2,5% versus the prior year mainly due to power outages at its plastics packaging subsidiary, Mega Pak Zimbabwe.

At its Carnaud Metalbox subsidiary, which supplies metal cans, crowns and aerosols, volumes were up 4,7% over the comparative period owing to growth in closures and high-density poly-ethylene categories. However, metal volumes were down.

“The comprehensive profit attributable to shareholders amounted to ZWL$51,55 billion (2022: ZWL$21,3 billion),” Van Gend said.

Total assets rose by more than half to ZWL$250,1 billion from the 2022 comparative.

Nampak Zimbabwe Limited, which is a subsidiary of the South African headquartered packaging firm Nampak Limited, engaged in self-funding activities for years according to its parent company.

This comes as the local operating environment has prevented Nampak Limited from receiving dividends for years, lowering shareholder confidence to inject capital to the Zimbabwean concern.

Nampak Limited reported last year that its Zimbabwean unit paid ZAR11 million (US$601 119,83) in dividends.

Nampak Limited also stated that fellow subsidiary, Nampak International Limited, made an equity contribution of ZAR26,2 million (US$1,43 million) to the group.-newday