JSE-listed packaging producer Nampak has reported an 11% year-on-year increase in revenue to R5.7-billion for the six months ended March 31, owing to volume growth and price management amid a challenging operating environment with limited consumer spending.

The group’s earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by 7% in the six months ended March 31, compared with the same six months of last year, to R1.1-billion.

Nampak has been focusing on improving its trading margins, controlling costs and reducing debt.  It has not declared an interim dividend.

The Beverage South Africa business, in particular, delivered Ebitda of R512-million, which represents an increase of 6% from R484-million in the prior comparable period.

This performance was complemented by a turnaround in the Diversified South Africa business, which reported Ebitda of R233-million in the reporting six months, marking a 53% increase compared with the Ebitda of R152-million generated in the prior comparable six months.

The Beverage Angola business posted a 36% year-on-year increase in Ebitda to R146-million.

Nampak’s cash generated from operations – before changes in working capital – increased by 38% year-on-year from R905-million to R1.2-billion in the six months under review.

This reflects an improvement in the group’s profitability, explains outgoing CEO Phildon Roux, noting, however, that cash generated from operations after working capital changes decreased by 42% year-on-year to R505-million.

The company spent R742-million to fund net working capital in the six months under review, which was split 50% between continuing and discontinued operations respectively.

Net working capital management remains a priority focus area for the group.

Nampak recorded a profit of R3-billion in the half-year under review, compared with a loss of R135-million in the prior half-year.

Earnings a share of R35.84 compared with a loss of R11.23 in the prior half-year.

Headline earnings of R555-million increased by 108% year-on-year, while headline earnings a share of R66.92 increased by 107% year-on-year.

Nampak's net asset value per share (NAVPS) of R21.58 in the reporting period was 16% higher than the NAVPS of R18.65 in the prior period. This was primarily owing to improved profitability in the current period.

The group’s net debt reduced by 33% from R4.5-billion in the prior comparable six months to R3.1-billion in the reporting six months.

Meanwhile, Nampak successfully concluded the sale of its Bevcan Nigeria business in January for R1.3-billion, which aided the group’s deleveraging and derisking strategy.

The company has also, since the end of the half-year, received proceeds of R77-million in respect of the sale of certain Kenyan assets.

Roux, who will step down from the CEO position at the end of September, says the market for beverages continues to be characterised by high local demand, with growth expected in the short to medium term owing to demand exceeding supply.

Market share gaining opportunities also remain prevalent in the Diversified South Africa business, with the momentum of manufacturing architecture initiatives having yielded positive results. More value accretive opportunities will yield further results in the short- to medium term, Roux confirms.

In respect of Beverage Angola, he is confident that the market and economic situation appears stable, which bodes well for revenue growth.

The outlook for Nampak as a group remains promising. “The continuity of strategic and cultural interventions bode well for sustaining performance into the future. The Nampak brand proposition continues to be strengthened by virtue of quality distinction,” Roux concludes.