Nampak limits support for Zimbabwe unit

NAMPAK is limiting support for its Zimbabwe unit, owing to incessant foreign currency shortages bedevilling Harare.

The group said currency woes continue to hamper its foreign currency earnings despite strong demand for its products as the country has pegged its official bond notes quasi on the US dollar.

In the year to the end of September, Nampak Zimbabwe raised headline earnings per share from 0.73 cents to 1.23c.

A revenue surge from $96 million (R1.33 billion) to $116.7m translated to a post-tax profit rise from $4.8m to $9.2m.

“A consequence of the lack of foreign exchange was that the South African shareholder reviewed and subsequently limited their support at the commencement of the third quarter, thereby curtailing their escalating exposure,” said company secretary Keith Nicholson. The company opted not to declare a dividend for the second year running.

The group said domestic inflationary pressures were likely to erode consumer demand gains notched up in previous months.

Nicholson said available cash was expected to settle outstanding foreign creditors, reduce foreign debt and fund future capital expenditure projects.

He said current liabilities, that include short-term borrowings of $1.9m and trade payables of $65m.

Non-current liabilities include long-term borrowings of $7.8m and deferred tax liabilities of $7.8m.

“The long-term foreign working capital borrowings relate to an unsecured shareholders’ loan from the parent company, Nampak International,” Nicholson said.

The Johannesburg listed Nampak raised its trading profit by 3 percent to R2bn.