Nampak reports R4b loss, exports to make it less reliant on SA economic recovery
Nampak experienced one of its most challenging years yet in 2020.
Most of the countries it operates in in sub-Saharan Africa opted for a hard lockdown at the end of March.
The packaging company reported a R4.3-billion loss in its results for the year ended 30 September 2020.
Group revenue declined by 23%, with an overall decline of 28% in the Metal division, 6% in Plastics and 10% in Paper.
Profitability was negatively impacted and trading profit declined by 56%.
The company was successful though in paying down debt.
The hard lockdown ban on the production and sale of alcohol products in also hit the company hard.
"This negatively impacted the sale of beverage cans, paper conical cartons, closures for the wine and spirit markets, as well as other products deemed as non-essential during this period."
Bruce Whitfield interviews Smuts on The Money Show.
It's been a very tough year for Nampak... We've written off R4 billion of assets in our rest-of-Africa operations, including some in South Africa.Erik Smuts, CEO - Nampak
In our Angolan operation things did not go well - the drop in the oil price certainly had a significant impact on our volumes in that market.Erik Smuts, CEO - Nampak
When we first invested in Angola, operationally we were very successful... Based on that we then invested in Nigeria and we overpaid for that investment many years ago and that's part of the write-off that we incurred in the current year.Erik Smuts, CEO - Nampak
In Nigeria we're actually doing very well at the moment...Erik Smuts, CEO - Nampak
In Zimbabwe, again operationally we are doing wonderfully but whatever money you make there evaporates in the short term, so unless the government can get their act together... the misery in that country will continue in the medium term.Erik Smuts, CEO - Nampak
In South Africa, he says, they are trading ahead of budget.
We have secured some export contracts... Those export orders will consume all our free capacity in our South African beverage can operations for the next year, therefore our reliance on the recovering economy in South Africa for the next year is going to be a lot less.Erik Smuts, CEO - Nampak
Smuts says the company has a list of assets it's aiming to sell.
We've already received non-binding offers for well in excess of R1 billion for those assets... but we are not going to dump assets at any price and hence there's some work still to be done.Erik Smuts, CEO - Nampak
Listen to the interview with Smuts on The Money Show:
Source : https://pixabay.com/photos/cans-drinks-beverage-pop-tabs-2618674/
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