Nampak releases results for the six months ending March

Nampak, Africa’s leading manufacturer of beverage, food and non-perishable packaging reported that strong results from the rest of the continent were offset by headwinds faced by its South African operations in the six months ended 31 March 2015.

“Trading profit from high-margin businesses in the rest of Africa have grown to contribute 38% to group trading profit, up from 27% in 2014”, said chief executive André de Ruyter. The company aims to increase this proportion to 50% as it increases production outside South Africa.

Nampak’s Bevcan division, notably in Nigeria and Angola, showed outstanding growth and was a major contributor to group profits. Bevcan Nigeria maintained volume growth while growth in demand for beverage cans in both beer and carbonated soft drinks continues. Bevcan Angola saw strong demand growth and sales volumes grew unabated. The operation commissioned its second aluminium line in May 2015 and is evaluating the installation of a third beverage can line in the next two to three years.

On the back of this, De Ruyter said good progress had been made in pursuit of fresh opportunities on the continent.

“We are evaluating potential glass opportunities in Angola, Nigeria and Ethiopia.”

Total capital expenditure for this period amounted to R1.2-billion, most of which was spent in South Africa, compared to R1-billion in the corresponding period in 2014. R430 million was spent on Nampak Bevcan’s conversion to aluminium, while R350 million went towards Bevcan Angola’s second beverage can line and a new warehouse. The balance was spent on other projects to enhance competitiveness in South Africa.

“The South African business environment is expected to remain challenging in 2015,” said de Ruyter. “We will, however, continue to focus on unlocking value from our base businesses. We expect further efficiency gains from the aluminium conversion and the third glass furnace in Roodekop to contribute to earnings in the short term.

“The group’s operations in the rest of Africa are expected to continue generating growth in revenue and profit. Our strategy; which focuses on growing glass, metal and rigid plastics in key markets on the African continent, is supported by an exciting pipeline of potential expansion opportunities.”