Nampak’s H1 turnaround: Angola drives growth despite a weak Diversified business

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Johannesburg-based aluminium beverage can manufacturing company Nampak delivered a resilient first-half (H1) FY2026 performance, backed by stronger profitability in its beverage operations, lower finance costs and continued balance sheet improvement, despite a sharp contraction in its Diversified business segment.

The company reported normalised headline earnings of ZAR 346 million (USD 21.34 million) in H1, up 9 per cent from ZAR 317 million (USD 19.55 million) year-on-year, while normalised headline earnings per share (HEPS) increased 8 per cent to 4,131.6 cents, reflecting improved earnings quality and lower borrowing costs. 

As noted by the CEO Riaan Heyl, the H1 result depicted a “performance resilience despite headwinds in Diversified with the strategic clarity, revenue growth management discipline and elevated cost efficiency focus instilled in the business during the past three years.” 

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Beverage business offsets weakness in Diversified segment

Nampak’s normalised EBITDA declined 6 per cent Y-o-Y to ZAR 816 million (USD 50.32 million) from ZAR 865 million (USD 53.35 million), primarily due to a ZAR 103 million (USD 6.35 million) reduction in earnings from the Diversified business.

The decline was partially offset by a 9 per cent increase in EBITDA from the Beverage segment, driven by robust performances in both South Africa and Angola.

Beverage South Africa recorded a 4 per cent increase in EBITDA to ZAR 533 million (USD 32.87 million), supported by customer retention initiatives despite lower export volumes and raw material supply disruptions.

Meanwhile, Beverage Angola emerged as a standout performer, with EBITDA surging 28 per cent to ZAR 187 million (USD 11.5 million), benefiting from an improving economic environment, currency stability, stronger consumer demand and growing export opportunities.

The company also confirmed that the relocation of its can manufacturing line from Angola to South Africa under the Springs Line 4 project remains on schedule and within budget. The project is expected to enhance production flexibility and increase packaging capacity across multiple formats.

Finance costs fall sharply as debt reduction gains momentum

One of the strongest highlights of the reporting period was Nampak’s continued progress in deleveraging its balance sheet.

Net finance costs declined Y-o-Y by 33 per cent to ZAR 189 million (USD 11.66 million) in H1 FY2026 from ZAR 282 million (USD 17.39 million) in H1 FY2025. The reduction was mainly attributed to lower debt levels following disposal proceeds received last year, improved working capital management and reduced borrowing costs.

Cash generated from operations reached ZAR 493 million (USD 30.4 million), despite ZAR 338 million (USD 20.8 million) being absorbed by working capital requirements. Net cash generated from operating activities climbed to ZAR 256 million (USD 15.79 million), compared Y-o-Y to ZAR 82 million (USD 5.06 million) in H1 FY2025, increasing by a drastic 212.2 per cent.

As a result, net debt excluding capitalised leases fell 30 per cent to ZAR 2.2 billion (USD 135.68 million) from ZAR 3.1 billion (USD 191.18 million), while net gearing improved markedly to 69 per cent from 149 per cent Y-o-Y.

Discontinued operations weigh on reported profit

Losses from discontinued operations amounted to ZAR 114 million (USD 7.03 million), largely due to a ZAR 136 million (USD 8.39 million) impairment related to Nampak Zimbabwe.

This contrasted sharply with the first half of FY2025, when discontinued operations generated a profit of ZAR 2.5 billion (USD 154.18 million) following the disposal of Bevcan Nigeria.

Consequently, total profit for the period declined by 86.33 per cent to ZAR 410 million (USD 25.28 million), compared Y-o-Y with ZAR 3 billion (USD 185 million) in H1 FY2025.

Headline earnings fell 47 per cent to ZAR 293 million (USD 18.07 million), while HEPS declined 48 per cent to 3,491.6 cents.

Robust net asset value

Despite the impact of discontinued operations, Nampak’s balance sheet continued to improve.

Net asset value per share increased to 34,759.2 cents, up 61 per cent from 21,587.9 cents Y-o-Y, indicating debt reduction and improved capital structure.

Capital expenditure and disposal plans continue

Capital expenditure during the H1 period amounted to ZAR 239 million (USD 14.74 million), including ZAR 126 (USD 7.77 million) million allocated to the Springs Line 4 relocation project.

Over the past 12 months, Nampak invested ZAR 474 million (USD 29.23 million) in capital projects while simultaneously reducing total net debt, including finance leases, by approximately ZAR 1 billion (USD 61.67 million) to ZAR 2.9 billion (USD 178.85 million).

The company also confirmed that the planned disposal of its 51.43 per cent stake in Nampak Zimbabwe remains under discussion with interested parties. Management expects the transaction to further reduce debt levels and eliminate exposure to Zimbabwe’s economic risks.

Outlook

Nampak expects its beverage operations to remain relatively resilient despite global economic uncertainty, inflationary pressures and subdued South African growth prospects.

Increased capacity and pack-format flexibility are expected to improve the competitiveness of Beverage South Africa, while Beverage Angola is expected to remain a key growth contributor.

Management also indicated that the ongoing restructuring of the Diversified business should support the development of a sustainable double-digit EBITDA margin operation once the reset programme is fully implemented.

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