- Nampak Limited reports challenging interim results with revenue of R8.4bn, up 4%, but an operating loss of R2.1bn and a headline loss of 54.5cps.
- The company emphasizes the strategic imperative of focusing on debt reduction and restructuring through a new business model, cost reduction program, and divestiture program.
- Nampak announces a proposed capital raise of up to R1.0bn through a rights offer, aiming to achieve a more suitable capital structure and reduce debt levels.
Nampak Limited, a leading packaging company, has released its unaudited consolidated interim results for the six months ending March 31, 2023. The company faced a challenging financial period, marked by revenue growth, increased debt levels, and the need for strategic restructuring.
During the first half of 2023, Nampak reported revenue of R8.4 billion, reflecting a 4% increase compared to the same period last year. The company’s trading profit rose by 17% to R899 million. However, net devaluation losses resulting from exchange rate movements in Angola and Nigeria amounted to R571 million, impacting the company’s operating profit.
Nampak experienced a significant decline in operating profit before net impairment losses, which decreased by 62% to R259 million. The company also faced net impairment losses of R2.4 billion and a substantial rise in net finance costs, reaching R494 million. Consequently, Nampak reported an operating loss of R2.1 billion and a loss for the period of R2.4 billion, translating to a loss of 396.6 cents per share.
Headline earnings suffered a significant setback, with a reported headline loss of 54.5 cents per share compared to headline earnings of 35.6 cents per share during the same period last year. Furthermore, cash generated from operations before working capital changes decreased by 45% to R591 million.
Acknowledging the unsustainable debt levels, Nampak outlined its strategic imperative to focus on a new business model aimed at unlocking value in the short to medium term. The company plans to implement a rigorous cost reduction program, initiate business remodelling, and achieve a significant reduction in net working capital as part of its short-term efforts.
To reduce its debt encumbrance to manageable levels, Nampak emphasized the critical role of its divestiture program. The company plans to streamline its portfolio of assets, thereby positioning itself for growth and establishing an efficient supply chain. Customer centricity will be prioritized as Nampak refines its go-to-market practices.
In line with its debt reduction strategy, Nampak announced a proposed capital raise through a rights offer. Initially requiring a minimum rights offer of R1.5 billion, the company has now reduced the requirement to up to R1.0 billion. Nampak will convene an Extraordinary General Meeting (EGM) to seek the necessary authorizations for the capital raise.
Management at Nampak will conduct an in-person and webcast presentation on May 24, 2023, at 10:00 Central Africa Time (UTC+2) to discuss the interim results and address inquiries from the investment community.