Nampak managed to double the profit transferred to SA from its Angolan, Nigerian and Zimbabwean subsidiaries during its 2018 financial year, but decided not to resume dividends yet.
Nampak has not paid a dividend since its 2015 financial year, and said in Tuesday’s statement it would not resume dividends “until the sustainability of cash transfers from Angola and Zimbabwe is assured and the disposal of the glass business is finalised”.
The group accounted for its glass division as a discontinued operation in its results for the year to end-September released on Tuesday morning.
Its overall revenue, excluding the glass division’s contribution, declined 0.5% to R17.3bn.
The R3.5bn the group was able to transfer from Angola, Nigeria and Zimbabwe helped net profit jump 60% to R569m.
A geographical breakdown of revenue and trading profit shows why Nampak has persevered in the rest of Africa despite the currency hassles.
The group generated 62% of its revenue in its home market including the glass division, and 41% of its trading profit.
Its rest of Africa division contributed 31% of the group’s revenue and 59% of trading profit.
Nampak’s subsidiaries in Europe turned to a trading profit of R5m from a loss of R64m in the previous year, and contributed 7% of the group’s revenue.
Segmented by packaging type, Nampak’s metals division contributed 59% of the group’s revenue and 79% of its trading profit.
The metals division suffered a 1.8% decline in revenue to R11bn but grew trading profit 2.4% to R1.7bn.
The metals division houses Nampak’s beverage can business, which faced competition from an unnamed new entrant during the financial year, and its food canning business DivFood, which was boosted by a recovery in fish volumes.
“In anticipation of this loss of volume, the closure of a beverage can line located in Epping, Cape Town, announced in 2017, was completed in July and has led to partial savings this year, with the full annual savings of R50m to be derived from 2019 onwards,” Nampak CEO André de Ruyter said in the results statement.
“The majority of the employees at this operation accepted retrenchment packages or opted for early retirement, while some of the employees were able to fill vacant positions elsewhere within the group.”
Regarding the outlook for the 2019 financial year, De Ruyter said “the entry of the second beverage competitor is expected to lead to additional volume losses in 2019 by Bevcan SA, while DivFood is expected to recover some volumes for meat cans”.
Nampak’s plastics division contributed 25% of the group’s revenue and 9% of its trading profit.
Its paper division contributed 8% of revenue and 10% of trading profit.
The glass division, which Nampak is in the process of selling, contributed 8% of the group’s revenue including discontinued operations and 1% of its trading profit.
“The proposed disposal of this division is progressing as planned and according to schedule. The detailed due-diligence processes have commenced with offers being evaluated,” De Ruyter said.