Panashe Nyamudeza and Jennifer Mufamba
The strong growth in revenue positively impacted the group's profitability for the year, which surged 27 percent in historical terms compared to prior year.
In a trading update Nampak said there was strong demand for its products across all segments of the business despite challenges in the operating environment.
"The three-month period from
Nampak's networking capital position is positive as the group holds
However, the group's gross margins retreated by 5 percent due to escalated costs.
"Margins were somewhat squeezed due to increased competition, while reduced power supplies resulted in greater generator use and the widening divergence between the auction rate and the market rate contributed to higher inflation," said the group.
Nampak said the printing and converting segment, Hunyani Corrugated Division, recorded a 43 percent sales volume growth driven by a carry-over of late-season tobacco box orders from the previous financial year.
The commercial sector volumes dropped by 3 percent compared to the same period last year propelled by paper supply challenges despite a strong order book. This is anticipated to carry on for the rest of the year due to world paper shortages.
Mega Pak saw demand in the large injection market exceed the company's available capacity while volumes decreased by 2 percent from the comparative period.
The group said all sectors of the business were affected by raw material shortages. Unreliable electricity supply at Ruwa affected both available plant capacity and operational efficiencies.
The increased demand in the market remained strong and there was an upturn in tank demand as regional economies are still recovering.
Nampak also said, indirect exports of preforms into
CarnaudMetalbox business depended largely on local agents for the supply of plastic raw material, which boosted its volumes 2 percent compared to the prior year quarter period.
Furthermore, the company's high-density polyethylene bottle volumes jumped 10 percent up on the previous year period aided by four percent growth in injected closure volumes.
Meanwhile, the metals volumes were down 13 percent as a result of tin plate shortages.
The capital expenditure for the period under review was
"A new injection molding Machine is on order for Mega Pak and the replacement of generators for
Nampak said it would continue engaging with the relevant authorities to regain effective control over its estates.
"At
Meanwhile, the company is still waiting for a long-term lease agreement from the government.
In the outlook, the company said the gap between the official and market exchange rates remains difficult and is now leading to an inflationary spiral, which in turn increases cost and wage pressures.
Nampak went on to say that the scarcity of raw materials and ongoing difficulties in accessing sufficient foreign exchange are ongoing challenges that are not going away any time soon.
However, businesses are resilient, but persistent economic headwinds hamper operations
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