Nampak cuts its debt while its losses worsen
Packaging company Nampak says it expects its full-year losses to widen because of impairments, currency devaluation and restructuring costs.
A headline loss per share for total operations of 70.2c-77c was expected compared with the previous year’s loss of 19.4c per share. The headline loss per share excluded capital profits and impairments, but included foreign-exchange losses, Nampak said in a Sens statement.
The company blamed its poor performance on the R4bn impairment and goodwill as well as net devaluation losses from Angolan and Nigerian exchange-rate movements.
In Zimbabwe, hyperinflation and currency devaluation amounting to R588m also hit the business. The company made impairments of R2.2bn in Nigeria and R1.2bn in Angola.
Nampak supplies packaging to the food manufacturing and dairy industry, and makes cans for the liquor and cool-drink sectors.
Like many businesses, the company was hit by the Covid-19 lockdown, and it was also knocked by asset disposal, restructuring and retrenchments costs.
In September, the group said that it had made progress in reducing debt as a result of disposals. During the 11-month period to end-August, Nampak made progress in reducing its US dollar debt, using the R1.4bn net proceeds from the disposal of its glass division and $16m from the sale of its Nigerian cartons business.
Loss per share for total operations was expected to increase to 518c-570c compared with the loss of 132.1c last year. Loss per share includes capital profits, foreign exchange gains/losses, restructuring costs and goodwill and asset impairments.
A headline loss per share for continuing operations of as much as 80.6c is expected compared with headline earnings of 54.1c per share in the prior year.
Nampak’s share price jumped 14.6% to close at R1.80 giving the company a market capitalisation of R1.2bn. Since January it has lost 73.65%.
The group has been listed on the JSE since 1969. It has assets in 11 countries across Africa.
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