Nampak’s Financial Shake-Up Unveiled – Shareholder Shock as Earnings Take Unprecedented Dive in 2023

  • Nampak anticipates a significant shift in financials, with projected HLPS of 46,100.0 to 47,600.0 cents.
  • LPS is expected to range between 116,900.0 and 117,800.0 cents, reflecting substantial deviation from the prior year.
  • Factors contributing to this include higher impairment losses, increased forex losses, and a surge in net finance costs.
By Lethabo Ntsoane

In a trading statement released on November 28, 2023, Nampak Limited, provided shareholders with a comprehensive overview of its anticipated financial performance for the fiscal year ending September 30, 2023. The company is currently finalizing its audited annual results, and in accordance with the JSE Listings Requirements, Nampak has disclosed that there is a reasonable degree of certainty that its financial results will deviate by at least 20% from the previous year.

Share Information and Corporate Actions

Before delving into the financial intricacies, let’s first look at Nampak’s share information. The company, with registration number 1968/008070/06, is listed on the Johannesburg Stock Exchange (JSE) with the following share codes and International Securities Identification Numbers (ISINs):

Share CodeISIN
NPKZAE000322095
NPP1ZAE000004966
NPKPZAE000004958

Furthermore, the company’s Legal Entity Identifier (LEI) is 3789003820EC27C76729. Notably, due to a recent share consolidation and rights offer, the weighted average number of shares in issue for the previous fiscal year has been restated in compliance with International Accounting Standard 33: Earnings per Share.

Financial Performance Overview

The crux of Nampak’s trading statement lies in the revelation that the financial results for the fiscal year 2023 are expected to significantly differ from the prior year. Let’s break down the anticipated changes:

1. Headline Loss per Share (HLPS) and Headline Earnings per Share (HEPS):

  • HLPS is projected to be in the range of 46,100.0 cents to 47,600.0 cents, a substantial shift from the HEPS of 7,589.2 cents reported in the previous fiscal year.

2. Loss per Share (LPS):

  • The company foresees an LPS between 116,900.0 cents and 117,800.0 cents, a notable contrast to the LPS of 4,879.5 cents in the prior fiscal year.

Key Factors Impacting Financial Results

Several factors have contributed to the anticipated fluctuations in Nampak’s financial performance for the year ended September 30, 2023:

1. Higher Impairment Losses:

  • Nampak has recognized higher impairment losses amounting to R2.8 billion for the current fiscal year. This represents a significant escalation from the R512 million recorded in the previous fiscal year.

2. Forex Losses:

  • The company incurred higher forex losses, amounting to R1.2 billion during the fiscal year, compared to R546 million in the prior year. These losses are primarily attributed to operations in Nigeria.

3. Net Finance Costs:

  • Net finance costs, inclusive of once-off refinancing advisory costs of R335 million, have surged to R1.2 billion. This marks a substantial increase from R586 million in the previous fiscal year.

Company Timeline and Audited Results Release

Nampak aims to provide shareholders with a comprehensive understanding of its financial performance by releasing the audited annual results on or about Monday, December 4, 2023. It’s crucial to note that the information presented in the trading statement has not undergone review or reporting by the company’s external auditors.

Conclusion

The challenges faced by Nampak in the fiscal year 2023 reflect the broader economic landscape and the intricacies of operating in diverse markets. The higher impairment losses, forex challenges in Nigeria, and increased net finance costs underscore the complexity of managing a multinational business in today’s dynamic environment.

As the company moves towards the release of its audited results, shareholders and stakeholders will be keenly watching for insights into Nampak’s strategies to navigate these challenges and position itself for sustainable growth in the coming years. The trading statement serves as a preliminary indication of the financial landscape, and the upcoming audited results will provide a more detailed picture of Nampak’s performance and its outlook for the future.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: lethabo@rateweb.co.za Twitter: @NtsoaneLethabo