Nampak posts strong first-quarter sales but foresees slowdown on COVID-19 impact

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  • Volumes increased across all segments
  • Following a relaxation in lockdown restrictions
  • Govt’s response to COVID-19 and economic measures to determine FY performance

HARARE – Nampak Zimbabwe Limited reported an impressive sales volume performance across all its operating units in the first quarter ended 31 December 2020 (Q1 2021), driven by a relaxation in COVID-19 induced lockdown restrictions.

This performance represents a significant recovery from the full-year ended 31 September 2020 slump in which the company recorded a decline in volumes across all segments on the back of COVID-19 induced impact on business operations as well as a generally poor economic environment.

In a trading statement, Nampak which specialises in manufacturing and market packaging products which include paper, plastic, and metal, said Mega Pak sales volumes grew by 76% compared to the prior-year period.

“Increased demand in the preforms market was the major contributor, but all areas of the business were up when compared to the prior-year period with large injection moulding also being significantly higher,” said the Group’s Managing Director John Van Gend.

“Exports were lower as regional economies also grappled with the COVID-19 impacts.”

Hunyani Paper and Packaging sales volumes were up 8% with sales volume in the commercial sector up 106% on the prior year led by improved demand while the tobacco sector was 25% below the prior year.

Van Gend said that the Cartons, Labels, and Sacks Division sales volumes for the first quarter were up on the prior year by 77%, due to robust sales of SO bags to the millers and cartons to food manufacturers on the back of the higher local wheat crop.

“Tobacco wrap sales were down in line with the lower tobacco crop,” he added.

Likewise, CarnaudMetalbox sales volumes for the quarter were 8% above same period last year.

However, Van Gend cautioned that the performance gains made in the first quarter are unlikely to be sustained in the second quarter owing to the lockdown, the tobacco packaging off-season, and lower seasonal demand.

“The outlook for the rest of the year will depend on the success of the agricultural season, the possible impact of further COVID-19 lockdowns, and the measures that the authorities take to tackle the macro-economic challenges,” said Van Gend.

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