Covid-19, persisting economic volatility double whammy drags Nampak’s FY20 sales

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  • Volumes tumbled across all segments
  • Revenue grew by a marginal 1%
  • No dividend pay-out

HARARE – Listed manufacturer and marketer of packaging products, Nampak Zimbabwe Limited has suffered a plunge in volumes across all segments for the year ended 30 September 2020. The company on Monday said it has not been immune to the social and economic impact of the COVID 19 pandemic and the resulting effects on the Zimbabwe economy over the past year.

Nampak manufactures and markets packaging products which include paper, plastic, and metal packaging. It also has interests in leasing biological assets and a timber processing plant.

Unit volume, a key measure that indicates demand declined by 12% under the Mega Pak division compared to the prior year, albeit increase in local demand in the final quarter of the year while regional export was depressed, especially in the Democratic Republic of Congo.

The Hunyani Corrugated division registered a volume decline of 28% driven by the tobacco case market where the local tobacco crop output was significantly down on the previous year and the delayed start of this year’s tobacco marketing season due to COVID-19 concerns.

CarnaudMetalbox volumes declined by 34% compared to the prior year as shortages of foreign exchange and reduced disposable incomes in the first half of the year negatively impacted demand.

Meanwhile, Softex continued to trade profitably as a result of tight cost control and an improved product mix.

The Group’s revenue for the period under review grew by a marginal 1% in inflation-adjusted terms to ZWL 5.1 million while a loss for the period narrowed by 89% to ZWL 0.658 million from ZWL 6.3 million recorded in the previous year.

Commenting on the performance, Group Managing Director, John Van Gend said, “The 2020 trading year has certainly not been without its challenges but, we believe, given the continual focus on cost control and margin preservation, that the Group is well-positioned to prosper in the coming year.

“Nampak looks forward to continuing cooperation with Government and all stakeholders towards achieving further much-needed reforms in Zimbabwe’s macro-economic environment,” he said.

In response to the crisis, the MD said the Group has decided not to declare a dividend with the available cash resources expected to fund future capital expenditure projects and meet working capital requirements.

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