| Tue 27 May 2003, 12:18 | | Analysts predict 37% hike in Nampak profit |
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May 27, 2003
By Bloomberg
Johannesburg - Nampak, Africa's biggest packaging company, was expected to report on Thursday a 37 percent increase in interim profit to R494.4 million, according to three analysts.
Earnings a share for the six months to March were estimated at 77.2c from 56.5c a year ago.
Analysts said profit might have been boosted by the inclusion for the first time of earnings of Malbak and of Crown Cork & Seal's African operations.
Nampak acquired Malbak, South Africa's second-largest packaging company, in August and bought the Crown Cork & Seal operations in February last year for $278 million.
Nampak controls more than 50 percent of the packaging market in South Africa.
It manufactures beer, fruit juice and soft drinks cans for customers such as Amalgamated Beverage Industries, a distributor of Coca-Cola products; Shoprite Holdings, Africa's largest supermarket chain; and Pick 'n Pay, the second-largest supermarket chain.
Nampak also makes credit cards, cellphone cards, tissues and plastic packaging.
South African sales might have been boosted by growing volume sales as economic growth accelerated to 3 percent last year, analysts said.
Smaller rival Astrapak said on May 6 that its sales surged 65 percent in the year to February 28 on increased prices, volume growth of 10 percent and acquisitions
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Nampak's sales from outside South Africa, which increased to 35 percent of total sales after the acquisition of Malbak, were probably hurt by the rand's 32 percent gain against the dollar during the six months covered by the reporting period, Trevor Evans, the executive chairman, said in January and again in April.
The stronger currency was also reducing demand for Nampak's packaging products from customers including SABMiller, the world's second-largest beer maker, Evans said.
Evans has spent $445 million in the past four years building Nampak through acquisitions in Africa and Europe.
"They had good trading in South Africa because of good economic growth," said Michele Olivier, an analyst at Barnard Jacobs Mellet Securities.
Rob Forsyth, an analyst at Investec Asset Management, which oversees investments of about $33 billion, said: "Volumes are good and margins should have been up."
Nampak shares have dropped 18 percent this year, compared with a 10 percent decline in the FTSE/JSE Africa all share index. The shares gained 5c to close at R11.55 on the JSE Securities Exchange yesterday. - Bloomberg
