Nampak not ready to pay dividends as Zimbabwe’s currency crisis persists
Packaging group Nampak has decided not to resume dividend payments to shareholders as Zimbabwe’s currency crisis lingers and because of a delay in the sale of its glass business.
The company decided in 2016 to suspend dividends so it could improve its financial position.
It said on Thursday profit from continuing operations in the six months to end-March fell 9% to R795m as revenue edged 4% lower to R8.5bn.
Nampak said it would not pay dividends “until the sustainability of cash transfers from Zimbabwe is assured and the disposal of the glass business is finalised”.
“The board is evaluating the various options available with a view to enhancing shareholder value,” it said.
Nampak said the rand value of its cash balances in Zimbabwe plunged to R466m, from R1.2bn at the end of September 2018, as the country’s currency devalued.
Meanwhile, the company said it is still in talks to sell the glass division to an SA majority black-owned business, which had secured funding for the deal.
“The process has, however, taken longer than anticipated due to the complexities of a transaction of this nature,” the group said.
Group CEO Andre de Ruyter said: “The first half of 2019 has been tough for a number of key businesses at Nampak.
“Significant currency volatility and concomitant adverse macro- economic conditions, particularly in Angola, have significantly held back performance,” De Ruyter said.
However, in Nigeria beverage-can volumes had “grown significantly” and the turnaround of the SA platics business “has picked up pace”.