Nampak projects tough outlook on elections
BUSINESS REPORTER
Zimbabwe’s largest packaging manufacturer, Nampak Zimbabwe Limited expects the business operating environment to remain challenging ahead of the upcoming elections as the period is fraught with uncertainties.
Zimbabwe will hold elections on August 23 this year. The economy has been battling exchange rate volatility and high inflation rate.
Nampak managing director John Van Gend said in a statement released along with the company’s half-year results to March 31, 2023, that the economy is still facing challenges such as the frequent power outages that disrupts business operations and limits the company’s ability to meet demand.
“The overall situation facing the economy remains challenging, with the election season upon us. We also anticipate a continuation of the current multi-currency environment,” Van Gend said.
The group’s revenue increased to ZWL$44,8 billion in the six months to March 31, 2023, a 56% increase from ZWL$28.6 billion reported in the previous comparative period.
The company reported a 63% in profit in the reviewed period to ZWL$3.6bn from ZWL$1.4bn reported in the same period in 2022.
There was an increase in the share of United States dollar (US$) transactions compared to the Zimbabwe dollar (ZWL$) in the period under review.
Although foreign currency inflows improved over the period, the tight liquidity conditions in the economy affected our ability to replenish raw materials on time.
Net working capital for the half year increased mainly due to increases in foreign currency denominated trade receivables and inventory as the group sought to preserve value.
Hunyani paper and packaging sales volumes for the period were 10% ahead of the prior year period.
The major contributor to this increase was the tobacco sector which was up 25%, due to additional volume demand from the region.
Commercial volumes were 8% down on the prior year period due to reduced supply of raw materials.
MegaPak volumes were 9% below prior year period due to incessant power cuts in Ruwa and an additional generator was procured to reduce the negative effects of the power cuts.
CarnaudMetalbox sales volumes for the half year were marginally down compared to the prior year period.
In plastics, HDPE was 5%ahead of the prior year period due to increased demand.
Metals volumes were significantly down due to raw material shortages, particularly in the first quarter.
Closures volumes were significantly up on the prior year period due to improved demand.
The board declared an interim dividend of ZWL$1.43 cents per share, which was paid on March 10 2023.
