South African company Nampak Limited has announced positive financial results for the first half of fiscal year 2024, highlighting a 7% growth in revenues, which reached 6.2 billion rand. Operating profit before impairment adjustments increased notably, reaching 1,005 million rand, a 328% growth compared to the same period last year. Likewise, EBITDA stood at 1,148 million, doubling its value compared to the previous year.
Total operating profit was 992 million rand, reversing a loss of 558 million recorded in the first half of 2023. Net income also showed a recovery, with a gain of 395 million, compared to a loss of 878 million in the previous period. Profits attributable to shareholders amounted to 447 million, a substantial improvement over the loss of 327 million recorded last year. No dividend was declared for this period.
Phil Roux, CEO of Nampak, attributed these advances to a strategic program that includes portfolio optimization, cost reduction, more efficient working capital management, and significant progress in asset sales. Despite macroeconomic challenges, such as low demand in South Africa and Angola, the metals division in South Africa showed outstanding performance thanks to these initiatives.
Cash flow generated from operations reached 878 million rand, far superior to the 21 million in the first half of 2023, while free cash flow stood at 810 million, reversing a cash outflow of 109 million in the previous year.
Regarding discontinued operations, which include units in Nigeria, Malawi, Zambia, and South Africa, the loss was reduced to 530 million, compared to 1,569 million in 2023, mainly due to lower impairment losses.
Nampak continues to advance in five strategic areas: portfolio rationalization, cost reduction, brand strengthening, customer focus, and development of an agile and efficient team.
By segments, the metals division grew 6% in revenue, primarily driven by the South African market. The plastics and paper divisions increased their revenues by 9% and 10%, respectively, while DivFood and Bevcan Angola experienced a decline in sales.
Roux noted that the challenging economy, with high inflation and rising costs, negatively impacted sales volumes in various categories, although the beverage category showed resilience with growth in beer and energy drinks, supported by improvements in product mix and operational efficiency.
The capital investment plan for this year includes 350 million rand aimed at expanding production capacity, including the new Springs Line 2, which will allow better servicing of the demand for large-size containers.
Finally, Nampak reported having completed asset sales for 2.1 billion rand, with resources allocated to debt reduction and support for the refinancing strategy implemented since September 2023.
Phil Roux concluded by noting that, although economic challenges persist in various markets, Nampak is better positioned to compete and continue with its transformation and improvement process.
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