Competitive pressures bite Nampak

SAMANTHA MADE

Nampak Zimbabwe, the publicly traded leading packaging manufacturer, reported an 8% decline in revenue for the year ended September 30, 2025, with turnover sliding to US$93.2m from US$101.3m recorded in the prior comparative period.

The fall came against a backdrop of subdued demand in key segments and intensifying competition.

Group Managing Director John Van Gend said the operating environment remained tough throughout the year, with the company navigating both internal and external pressures.

“The 2025 trading year has not been without its challenges, both internally and externally. The past year has been challenging for Nampak Zimbabwe as the competitive landscape intensified with new entrants across all segments of our business,” Van Gend said.

Overall group sales volumes declined by 5% year-on-year, largely driven by shifts in customer purchasing behaviour.

“Group volumes for the full year decreased by 5% compared to the prior year. The decrease was due to the market shift in the commercial category as some customers invested in producing their packaging requirements in-house, whilst competitive pressures in the preforms category saw volumes trending below the prior year,” he said.

Despite the revenue fall, the group delivered a stronger profitability performance. Profit for the year surged to US$7.81m, up from US$4.97m in 2024, reflecting tighter cost controls, improved operational efficiencies and the non-recurrence of a prior-year monetary loss. Basic earnings per share (EPS) rose 56%, climbing to US$1.03 cents from US$0.66 cents previously.

Cash generation also strengthened. Cash generated from operations before working capital changes increased by 28% to US$13.56m. Nampak Zimbabwe closed the period with a solid balance sheet, ending the year with US$6.76m in cash compared to US$1.86m last year, and maintaining a healthy current ratio of 2.9 times.

The group continued to invest for future growth, directing US$3.62m towards capital expenditure in the period. These investments include upgrades aimed at boosting capacity and improving plant services.

“There are some significant capital projects currently being reviewed by management which aim to increase our capacity on some lines whilst also maintaining our asset base,” Van Gend said.

Looking ahead, the company expects another demanding year but remains confident in its ability to withstand emerging challenges.

“I believe that the continual focus on cost control and margin preservation has positioned the Group well to meet these challenges,” he said.