Africa’s largest packing company bouncing back

Nampak’s turnaround plan is bearing fruit, as the company has managed to increase its earnings significantly and swing back into profit with its continuing operations.

Nampak released its results for the year through September 2024 today, which revealed an improved performance for the company.

For its continuing operations, Nampak’s revenue increased by a modest 0.76% to R10 billion.

The company swung from a loss to a profit, improving from a loss of R2.21 billion to a profit of R625.6 million.

However, when looking at total operations, Nampak still made a loss of R381.4 million, although this is still a significant improvement from the loss of R3.95 billion a year prior.

The company’s basic earnings per share from continuing operations also swung to profit, from a loss of 64,415 cents in 2023 to earnings of 7,554 cents per share.

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.

This has made a significant dent in Nampak’s balance sheet. While its assets decreased due to the sales, so did its liabilities.

Despite adding R497.3 million in liabilities directly associated with assets classified as held for sale, the company’s current liabilities fell by over 32%. Non-current liabilities fell by hust under 16%.

In the 2024 financial year, Nampak’s debt was also refinanced, resulting in all debt at 30 September 2024 being classified as long-term debt, with 98% of net debt being rand-denominated.

“Over the past twelve months, Nampak has taken positive strides on its ambitious transformation journey,” the company said. 

“The success of the turnaround strategy to date is evidenced by the strong financial recovery including effective revenue growth management, cost and inefficiency extraction, profitability and positive cash flow.” 

“This was augmented by the successful refinancing, numerous divestitures of non-core assets in line with the asset disposal plan and the implementation of a sustainable business model.”

In line with this, Nampak’s board also decided not to resume dividends to shareholders until debt levels are significantly reduced.