Nampak on the mend

Nampak expects an improvement in its financial results for the year through September 2024, but its total operations are still expected to make a loss.

In a trading statement released on Wednesday, Nampak said it expects significant improvements in its earnings.

When looking at the business’ continuing operations, it becomes clear that Nampak’s turnaround plan is paying dividends.

The company’s headline loss per share and loss per share swung to a profit, with Nampak expecting to report earnings per share of between 7,300 cents and 7,700 cents.

For its total operations, its headline loss per share from 2023 also swung into a profit, with the company expecting to report headline earnings of 3,100 to 3,500 cents per share.

However, the company’s loss per share remained in the red, although there was a significant improvement.

In 2023, Nampak reported a loss per share of 117,295.5 cents per share. In 2024, it expects to report a loss per share of between 4,300 and 4,900 cents – an improvement of around 96%.

These improved results come as Nampak is implementing a turnaround plan, which includes a drastic restructuring of the business.

Nampak implemented an aggressive asset disposal plan aimed at raising R2.6 billion. 

In March 2024 alone, Nampak sold around R450 million worth of assets, which included its South African liquid cartons business and the issued shares of Nampak Zambia and Nampak Malawi.

The company also divested its 51.43% stake in Nampak Zimbabwe $25 million (around R438 million). This move reduced Nampak’s exposure to economic volatility in Zimbabwe​.​

In addition, the company exited operations in Nigeria due to challenges with currency devaluation and rising costs of US dollar-funded raw materials

Aside from asset disposals, Nampak also raised R1 billion through a rights offer and successfully refinanced its debt with Standard Bank. 

These measures, along with the proceeds from disposals, have significantly reduced Nampak’s debt and simplified the company’s funding structure​.

This trading update revealed that Nampak’s efforts are paying off, as the business is now in a far stronger position than it was in 2023.