Nampak’s profit boosted by African operations

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“Nampak had a strong 2014, marked by continued delivery on our ambitious strategy to unlock further value from our base business and accelerate growth in the rest of Africa. The contribution to trading profit of operations in the rest of Africa increased to 30 per cent from 26 per cent in 2013,” said André de Ruyter, chief executive officer of [DATA NPK:Nampak LTD.]

Headline earnings per share rose by 14 per cent to 237 cents, supported by a ten per cent increase in revenue and an eight per cent increase in trading profit.

Trading profit from the rest of Africa grew by 25 per cent to 616 million rand mainly due to the contribution of the newly acquired Bevcan Nigeria and a sound performance from its Angola beverage can operation.

(READ MORE: Nampak saved by its African operations)

A final dividend of 153 cents was declared for the year, up nine percent to 107 cents per share.

De Ruyter added that notable achievements in South Africa for the group include the commissioning of a third glass furnace, the sale of their Cartons and Labels division and the conversion of their beverage can lines in Springs to aluminum.

(READ MORE: Caxton set to buy Nampak Carton and Labels division)

“Throughout our operations, the launch of the ‘buy better, make better, sell better’ business improvement initiatives as well as the concerted efforts to improve our safety record continued to drive performance,” he said.

However, due to challenging conditions in South Africa, trading profit fell by 15 per cent due to margin pressure experienced in the paper, flexibles and plastics divisions.

Operating profit also dropped by 16 per cent due to charges attributable to the impairment of the South African corrugated, sacks and Tissue divisions arising from their proposed disposal.

Nampak Glass posted an operating loss because of capacity constraints in the final quarter resulting from the late commissioning of its third furnace and production inefficiencies on its other two furnaces.

“With the outlook for South African economic growth modest at best, Nampak is putting a strong emphasis on rigorous management of factors under its control,” said de Ruyter.

“Already established as the packaging leader in Africa, with operations in 11 African countries beyond South Africa’s borders, we continue to focus on taking advantage of Africa’s upward growth trajectory.”

(READ MORE: Nampak sees drive for packaged goods in Africa )