Zimbabwe Stock Exchange listed packaging company Nampak Zimbabwe (Nampak) remains troubled by a $9,3 million short-term borrowings relating to a facility owed to parent Nampak International Holdings.
At the end of Nampak’s last financial year to September 2017, there were indications discussions were in place to roll over the debt.
According to the company’s latest half year results for the period to March, short term borrowings stood at $9,3 million up from $9,2 million in the first half of 2017.
“The short term borrowings relate to unsecured shareholders’ loans from the parent Company, Nampak International Limited, and bear interest at a rate of 5,7 percent per annum,” said Nampak in its unaudited interim results for the period ended March, 2018.
The company reported a 65 percent growth in obligations to pay off short-term debt to its creditors and suppliers in the first half of 2018 compared to the same period prior year.
According to the interim results trade payables closed the reporting period at $49,4 million, up from $29,9 million in the first half of 2017.
This resulted in a $21 million growth in current liabilities to $69,8 million compared to $48,6 million in the same period prior year. Non-current liabilities, comprised of deferred tax liabilities, were $7,1 million and flat on last year.
Capital and reserved grew to $70 million from $66,7 million driven by a $3 million growth in retained earnings.
In a statement, Nampak said group revenue was 23 percent up on prior year as a result of improved demand, with trading income of $5,07 million compared to $2,25 million last year. This was a growth of 125 percent.
Operating profit stood at $5,05 million from $1,55 million.
“While gross margins declined slightly, operating profit was significantly ahead of the prior year as a result of stringent cost containment and lower re-organisation costs. Net working capital decreased due to the accumulation of foreign trade payables which increased due to the lack of liquidity in the foreign exchange environment. The cash and cash equivalent balances increased in direct response to the aforementioned illiquidity,” the company said.
On the printing and converting segment, Nampak said, Hunyani revenue decreased by 5 percent in comparison to the prior year.
The company said its corrugated products division experienced reduced volumes as late tobacco box orders received last year were not repeated, adding competition from new entrants in the corrugated commercial sector was however partly off -set by strong commercial demand. The cartons, labels and sacks division improved their volumes with growth in self-opening bags and tobacco rolls.
Carnaud Metalbox’s revenue was 21 percent up on last year and returned to profitability. The performance was driven by strong demand from the beverage, dairy and food sectors. Mega Pak revenue was up 69 percent on last year with significant improvement in operating profit.
This was due to recover y in demand for PET preforms and higher closure volumes supplied to the beverage and cordials sectors. The recover y was limited by capacity constraints on some product lines.
Capital projects of $2,1 million, the majority of which were approved in the prior financial year, were spent largely on replacement machinery.
The company said foreign exchange constraints continued to hamper capital expenditure programmes.
SOURCES : THE HERALD