| Mon 23 Nov 2009, 14:27 | | NPK - Nampak Limited - Weak Demand And Corrugated Business Drag Nampak Down |
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NPK - Nampak Limited - Weak Demand And Corrugated Business Drag Nampak Down
Press Release - Nampak 2009 Final Results
NAMPAK LIMITED
Registration number 1968/008070/06
Incorporated in the Republic of South Africa
ISIN: ZAE000071676
Share code: NPK
("Nampak" or "the Company")
PRESS RELEASE - NAMPAK 2009 FINAL RESULTS
WEAK DEMAND AND CORRUGATED BUSINESS DRAG NAMPAK DOWN
Nampak today released its results for the year ended 30 September 2009.
Revenue grew 6% to just under R20 billion mainly through the recovery of raw
material price increases and improved trading from African operations. The
recessionary conditions saw volumes falling by 6%.
Trading income before abnormal items fell by 27% due to a substantial loss in
the Corrugated business, lower volumes across the group, the liquidation of a
large dairy customer in the UK, and losses at our Leeds carton operation and in
a number of smaller businesses in South Africa.
Headline earnings per share were 53% lower due to a loss on the fair value of
financial instruments compared to a gain in the previous year as well as an
increase in finance costs following the completion of several large capital
projects.
Total capital expenditure of R1.1 billion was spent largely on completing the
Rosslyn paper mill and on the Angola beverage can factory.
CEO Andrew Marshall said, "Despite the challenging economic conditions, trading
income in Nampak`s core businesses was similar to last year:
- Metals and Glass was slightly down;
- Rigid Plastics was marginally up;
- Tissue had a good year;
- Cartons and Labels, Flexibles and Sacks were in line with the previous
year;
- Africa overall was in line with last year with good performances from
Nigeria and Zambia in particular;
- Europe was profitable but was well down on last year. The good performance
from Nampak Healthcare and some of our cartons operations was offset by losses
at Leeds as well as the Plastics reduction in profits due to the third-largest
dairy in the UK, and one of our largest customers, going into liquidation.
The strategic review completed after I joined the group in March concluded that
80% of our operations are profitable and have sustainable competitive
advantages. We aim to grow these businesses. The remaining 20% are either loss-
making or earning low returns and will be fixed, sold or closed.
Capital expenditure in recent years has been very high, so we plan to reduce
this to a level below our depreciation. In addition, we shall focus on the
reduction of debt and costs across the group".
"The state of the economies in which we operate is still a cause for concern and
there has been no noticeable improvement in volumes since year end. The strength
of the rand will continue to hamper an improvement in trading conditions in the
South African businesses. Volatility of input costs may negatively impact
trading income in the early part of the year.
The expected turnarounds in the South African Corrugated and UK Leeds cartons
business as well as the exiting of some of our underperforming businesses should
enable the group to improve profitability for the year ahead" he concluded.
Contact:
Nampak Investor Relations
Graham Hayward
Tel: 011 719 6320
Cell: 082 800 7863
graham.hayward@za.nampak.com
Sandton
23 November 2009
Sponsor: UBS (South Africa) (Pty) Limited
Date: 23/11/2009 14:27:01 Produced by the JSE SENS Department.
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