• Nampak Zimbabwe volumes increased 16% during the nine months to June 2026 and revenue rose 9% to US$67.8 million, led by tobacco packaging and recovering plastics demand
• Nampak Limited recognised a R182.5 million equivalent US$10.9 million impairment against the Zimbabwe disposal group in March after the failed US$25 million TSL transaction
• The subsidiary remains ungeared and Nampak SA’s own net debt has fallen sharply since the disposal strategy began

Harare- Nampak, the country’s biggest packaging company has generated US$67.8 million in revenue during the nine months to June 2026, 9% ahead of the comparative year, propelled by volumes growth of 16%, supported heavily by tobacco packaging orders carried into the first quarter, while third quarter volumes advanced 4%.

The operating recovery has broadened beyond tobacco. Mega Pak volumes increased 8% over nine months and accelerated 14% during the third quarter. CarnaudMetalbox also recorded a 14% third quarter increase after recovering from production stoppages, while HDPE volumes surged 33% following capacity enhancements and stronger customer demand.

Those numbers arrive five months after Nampak Limited recognised a R182.5 million impairment, equivalent to US$10.9 million, against its Zimbabwe disposal group. The impairment followed a fair value less costs to sell assessment at 31 March 2026 which placed the recoverable disposal value below the carrying value of the assets.

That accounting charge makes the latest volume recovery particularly relevant. Nampak Zimbabwe has not been sold, Nampak Limited still owns 51.43% and continues to classify the business as held for sale. The commercial question has therefore changed from whether Nampak SA should leave Zimbabwe to what price should compensate it for leaving now.

Nampak’s original disposal strategy reached an advanced stage. The group accepted a non binding offer on 30 September 2024 for TSL Limited to acquire its 51.43% Nampak Zimbabwe stake for a maximum US$25 million. A formal disposal contract followed on 25 March 2025. The transaction cleared due diligence and competition authority approval. The buyer subsequently withdrew after its circumstances changed. Nampak continued marketing the stake after the collapse of the transaction.

The US$25 million offer remains an important valuation anchor. It implied a value of approximately US$48.6 million for 100% of Nampak Zimbabwe before taking account of any control premium, transaction structure or other adjustments. The asset was also carrying considerably stronger operating earnings when Nampak first moved towards disposal.

Nampak Limited’s accounts show Zimbabwe revenue of R1.88 billion during the year ended September 2024 with EBITDA before capital and other items of R332.6 million. The following year revenue fell to R1.68 billion and EBITDA before capital and other items declined to R222.6 million. Operating cash generation still increased from R111.9 million to R149.5 million.

The deterioration in operating earnings helps explain why a valuation reassessment eventually became necessary. At September 2024, Nampak Zimbabwe was classified as held for sale without an impairment because its expected recoverable value exceeded its carrying value. Net assets attributed to the disposal group stood at R501.9 million. They increased to R664 million by September 2025.

By March 2026 the calculation had changed. Nampak tested the business using fair value less costs to sell and recognised the US$10.9 million impairment. Net assets following the adjustment stood at R542.9 million. The write down was therefore linked to what the parent believed it could recover through a sale at that point in time. It was not a conclusion that the Zimbabwe factories had stopped producing economic value.

However, the earnings recovery is still incomplete. The June trading performance provides evidence of physical recovery, yet iIt does not establish an earnings recovery of the same quality. This distinction is central to assessing whether Nampak SA is walking away from a valuable asset.At the parent reporting level, Nampak Zimbabwe generated R702.6 million of revenue during the six months to March 2026 against R692.2 million previously.

Trading profit fell to R41.7 million from R99.1 million. That puts the implied trading margin at approximately 5.9%, down from around 14.3% in the comparable period, Hence, revenue held, yet profitability weakened sharply.

The Zimbabwe company’s own interim reporting showed the same mechanism. US dollar revenue increased approximately 10% to US$41.7 million during the six months to March 2026, while profit after tax declined to about US$306,000 from US$2.87 million. The nine month update does not provide an updated profit number. Management explicitly said profitability remains under pressure from rising costs and aggressive market pricing.

That prevents the 16% volume increase from being interpreted as a full earnings turnaround. The asset is selling more packaging. The amount of economic value retained from each additional unit remains the unresolved issue.

Meanwhile, Mega Pak provides the strongest evidence that part of the asset could be entering a stronger utilisation cycle, nine month volumes rose 8%, third quarter volumes increased 14%, and demand recovered across product categories. The business still had to sacrifice margin to remain competitive.

Power supply also deteriorated in Ruwa. Nampak has invested in generators to keep factories operating, which protects production and adds fuel and maintenance costs. Competitive conditions limit the amount of those additional energy costs that can be passed to customers.

That creates a classic manufacturing utilisation problem, as higher volumes improve fixed cost absorption, yet generator usage raises variable production costs. Price competition restricts recovery of those costs from customers. The earnings outcome depends on whether factory utilisation gains exceed the additional energy and pricing burden.

Mega Pak’s 14% quarterly growth is therefore commercially valuable only if the business can restore energy reliability at a lower cost per unit. Management is already seeking longer term energy solutions. The capital allocation case is increasingly clear. Reliable embedded generation capable of reducing the unit cost of energy would capture a larger share of the value generated by the volume recovery than continued diesel generation.

On the upside, the CarnaudMetalbox result contains another significant operating development.

Overall volumes increased 4% while third quarter volumes increased 14%. Metal packaging remained materially below prior year, while HDPE volumes increased 33%. The divergence inside the same business unit showed where demand and capacity investment are currently producing the strongest return. The group attributed the HDPE increase to stronger customer demand and capacity enhancements implemented during the quarter. That makes HDPE one of the clearest cases where investment has translated directly into additional volume.

Metal packaging faces a different cycle. Demand remains subdued and raw material supply disruption has affected availability. The company expects some improvement during the final quarter. The distinction matters to a prospective acquirer. Nampak Zimbabwe is a portfolio of packaging assets with different earnings trajectories.

A buyer is acquiring exposure to growing plastic packaging, tobacco linked paper packaging, challenged metals operations and commercial printing exposed to customer insourcing. The valuation needs to capture those individual cash generating characteristics.

Hunyani Paper and Packaging remains another major source of current volume growth as corrugated volumes increased 26%, supported by a larger Zimbabwe tobacco crop and the carryover of late season tobacco case orders. Third quarter Hunyani volumes were flat against the comparable period.

Tobacco sector volumes during the quarter increased 3%. The slowing quarterly rate shows that much of the 26% nine month increase was generated early in the year. That matters for the final quarter comparison. The tobacco carryover boosted the first nine months and cannot simply be annualised into the next financial year. Zimbabwe’s larger tobacco crop still creates a strong packaging demand base. Nampak’s future earnings depend on how much recurring carton demand remains once the carryover effect clears.

However, one part of the business faces a harder problem. Commercial carton volumes declined 9% during the third quarter because some customers have shifted packaging manufacturing in house, while Cartons, Labels and Sacks volumes fell 8% during the quarter and remained 5% lower over nine months.

This represents demand leaving the addressable market. A customer bringing packaging production inside its own operation permanently removes part of the volume previously available to external manufacturers. Recovering that revenue requires Nampak to win new customers or offer packaging capabilities that remain uneconomic for clients to replicate internally. This is a competitive positioning issue with direct implications for the valuation of the printing operations.

An acquirer should therefore place a lower multiple on volume exposed to continued customer insourcing and a stronger multiple on product categories where demand growth is supported by manufacturing scale and technical barriers.

Nampak SA Had A Rational Reason To Sell

The original disposal decision needs to be assessed within Nampak Limited’s financial position in 2024. The South African group was executing a large asset disposal programme after a period of severe financial stress. Inclusive of leases, group net debt stood at R5.3 billion at September 2024. Nampak used proceeds from business disposals to repay debt and simplify a balance sheet that had previously carried heavy financing and currency risk

Nampak Zimbabwe was one component of that programme. The parent was reducing the number of countries and packaging categories in which it operated and concentrating resources around its core beverage and metals franchises. Selling the Zimbabwe stake for cash would release capital, reduce geographic risk and accelerate deleveraging.

That was a defensible decision, and the latest Zimbabwe numbers do not invalidate it. Nampak Zimbabwe remains exposed to electricity shortages, imported raw material risk, fuel inflation, customer insourcing, competitive price pressure and Zimbabwe specific policy and currency risk. The subsidiary is currently ungeared, which improves the quality of the underlying asset. The debt problem that motivated the sale existed primarily at the South African parent.

Nampak SA’s own recovery changes the negotiating position. By March 2026, net debt excluding capitalised leases had fallen 30% to R2.2 billion from R3.1 billion a year earlier, while net gearing had declined to 69% from 149%, with net finance costs down 33%. Nampak said proceeds from the eventual Zimbabwe disposal would still be used to reduce debt and remove exposure to the Zimbabwe operating environment.

The balance sheet therefore remains a reason to sell. It has ceased to be the same degree of forced seller pressure that existed when the disposal programme began. That is the most important capital allocation change around the transaction. Nampak SA can afford greater patience.

The company should preserve the US$25 million failed TSL transaction as a reference point when assessing new offers and require evidence that any reduction from that level is justified by sustainable deterioration in the subsidiary’s cash generating ability.

The March impairment should not automatically become the negotiating price. It is an accounting assessment based on fair value less costs to sell at one measurement date. The next buyer is purchasing future cash flows.

The decision to sell was rational. Nampak needed deleveraging, portfolio simplification and reduced exposure to volatile markets. The wider asset disposal programme has contributed materially to the improvement in its balance sheet. Net debt and finance costs are now substantially lower.

The evidence does not support treating Nampak Zimbabwe as a failed asset. It generated positive operating cash flow in 2024 and 2025. It remained profitable in 2025. It is ungeared. Current volumes are growing. Plastics demand has recovered strongly and HDPE volumes are up 33%.

The weakness is in earnings conversion. First-half trading profit fell sharply, margins are under pressure, power costs are rising, commercial customers are internalising packaging, and metal volumes remain weak, which justifies a valuation discount until earnings recover. The decision to exit Zimbabwe and the price achieved for the exit are two separate capital allocation calls.

Nampak SA may be right to leave, but it can still destroy value by selling too cheap. The final quarter should test the quality of the nine-month recovery before any new offer is accepted. Four things matter, Mega Pak must hold double-digit volume growth while cutting generator costs, CarnaudMetalbox must turn 33% HDPE growth into better margins and start recovering metal volumes, Hunyani must prove carton demand holds after the tobacco carryover fades, and group profit must start catching the 9% revenue and 16% volume growth posted to June. A margin recovery strengthens Nampak SA’s hand in negotiations, continued compression validates part of the March impairment and supports a lower price. The asset is operationally improving and the balance sheet is stronger, so the case for exiting remains, but capital discipline now means refusing to turn a strategic exit into a bad sale.

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