HARARE, November 18 (The Source) – The paper and packaging company, Nampak Zimbabwe, has reported a 65 percent increase in operating profit for the full-year to September 30 to $6,8 million from $4,1 million recorded in the prior year.
Revenue was largely flat at $95,2 million — compared to $95,9 million last year — but margins improved on production efficiencies, the company said on Friday.
Pre-tax profit stood at $6,4 million while net profit, at $4,3 million, was higher compared to $2,4 million achieved in the same period last year.
Trade payables increased by 23 percent to $27,4 million on the back of foreign currency scarcity.
“The shortage of foreign currency resulted in the accumulation of foreign trade payables. This also contributed to the higher cash balance of $21,1 million (2015:$10,1 million)”, said the group company secretary Keith Nicholson.
The Carnaudmetalbox unit saw its volumes and revenue going down during the year even though it continues to trade profitably.
Hunyani volumes and net revenue were on par with 2015 but operating profit increased substantially due to lower non-recurring costs and efficiencies achieved from the new tobacco line.
The new preform equipment commissioned in 2015 improved the performance of Mega Pak, unit with revenue and operating profit increasing on prior period.
“Operating profit was ahead of the prior year on the back of cost containment and production efficiencies. The new preform equipment commissioned in 2015 made a positive contribution and was strategically positioned to meet increased customer demands”, said Nicholson of the unit.
Nampak spent $5,9 million on capital expenditure, including on equipment for Mega Pak and CarnaudMetalbox.
The import restrictions imposed by the government through statutory instrument 64 of 2016 will benefit the company, Nicholson said, enabling it to increase volumes and sales by servicing the local market without competition from foreign products.
Nampak Zimbabwe was created following the merger of Hunyani, CarnaudMetalbox and MegaPak in August 2015. South Africa’s Nampak holds a controlling 51.43 percent interest in the merged entity.
Beverages manufacturer Delta Corporation, swapped its 51 percent shareholding in Megapak for a 23 percent stake in the new firm. Agro-processor TSL also exchanged its 40 percent shareholding in Hunyani for a 17 percent stake in Nampak Zimbabwe.