eBusiness Weekly
Business Writer/News24.com
In a trading update for the five months to end – February, Nampak said strong volume growth for beverage cans helped to grow its revenue by more than 20 percent, with the group’s Zimbabwean operations coming strongly on the plastics division.
Demand for certain of Bevcan South Africa’s products exceeded its available capacity.
“Higher selling prices, resulting from significant increases in aluminium prices, was a key contributor to revenue growth as these price increases had to be passed onto customers using contractual pass-through pricing mechanisms,” Nampak said.
Bevcan Nigeria also performed very well and was a major contributor to improved group results for the period.
Growth in the plastics division was driven by the strong performance of the group’s Zimbabwean operations, supported by a solid performance from the liquid cartons business in South Africa. Plastics South Africa’s performance was “reasonable” but lower volumes, due to a long strike at a key customer, impacted profitability negatively.
The company said that there is increased pressure on cash flows to fund working capital.
“Significantly higher commodity and shipping prices, coupled with global supply chain disruptions, led to a higher than planned investment in working capital to ensure continued supply of raw materials into our operations. The newly added geopolitical risk of the Russian/Ukrainian war has put additional pressure on working capital.”
The group’s ability to reduce its net interest-bearing debt by R1 billion by 30 September 2022 will be assessed by the funders in June.
“Cash proceeds from the disposal of assets, internally generated cash, the use of the group’s non-recourse trade finance facility and/or proceeds raised from a capital raise will be considered in determining the group’s ability to repay net interest-bearing debt.”
