Nampak in $9m capex

HARARE - Packaging firm, Nampak Zimbabwe Limited (Nampak), has spent close to $9 million in capital expenditure in the full year to September 30, 2015 as the company moves to buttress operating capacity in its consolidated businesses.

The group’s company secretary, Keith Nicholson, on Thursday said the money was channelled towards the purchase of machinery.

“The major expenditure was on the preform machinery, $2,9 million, and the tobacco line, $2,3 million, with the balance spent on various plant and equipment, IT infrastructure and the vehicle fleet,” he said.

This comes as the South African company last year consolidated its shares in three packaging firms, Hunyani Holdings (Hunyani), MegaPak and Carnaud Metalbox (Carnaud).

Speaking on the group’s performance during the year under review, Nicholson was quick to point out that the presented results reflected the consolidated Nampak Group operations whereas the prior year comparatives contain only Hunyani’s published figures, making meaningful comparison difficult.

But, group revenue for the consolidated operations declined by five percent against the prior period, attributed to a drop in aggregate domestic demand.

Operating profit was depressed on the back of lower margins, as the group also incurred re-organisation costs in manpower restructuring of $1,1 million, mainly at Hunyani, and a once-off charge of $358 000 relating to the merger of the three businesses.

The group’s CarnaudMetalbox performed ahead of prior year with revenue up 13 percent and returned to profit after a loss last year, with the growth attributed to improved can and HDPE bottle sales.

At Hunyani, revenue and operating profit after abnormal items decreased by two percent and 59 percent, respectively on the prior period.

“Corrugated Products benefitted from improved commercial demand and solid tobacco carton volumes. A new tobacco line was commissioned in September.

“At Cartons, Labels & Sacks, demand from major customers was subdued. The reduction in costs and new machinery should place this business on a solid footing for 2016,” said Nicholson.

Mega Pak revenue slumped 13 percent compared to the prior year and as operating profit was below prior year by 43 percent, on the back of depressed volumes for PET and preform products, falling prices and reduced demand by the major customer for large plastic injection and blow-moulding products.

No dividend was declared for the period, as the group noted the economic outlook remains challenging with little relief in sight for the manufacturing industry.

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