PACKAGING company Nampak Zimbabwe Limited says it will continue to prioritise cost containment and margin preservation this year, given the ongoing unpredictability of the trading environment in the country.
In its 2023 annual report, the firm said the trading year saw a lot of complexities in the operating environment, particularly around currency, inflation and power shortages.
“We, however, noted some volume growth, and improved demand despite these challenges,” the company said.
“The economy will be affected by the anticipated effects of El Niño which could impact the agricultural season ahead. The group will continue to focus on cost control and margin preservation in order to meet these challenges.”
With the elections behind and the government re-elected for a further five years, the company hoped that progress will be made towards resolving some of the macro-economic problems, which have bedevilled the manufacturing sector.
While the groups’ order book remains positive and the company is debt-free, Nampak said the effects of international developments such as the ongoing war in Ukraine and the conflict in the Middle East between Israel and Palestine, would continue to impact the supply chain for raw materials.
“This, coupled with the matters highlighted above, if left unaddressed, will present difficulties in the year ahead. Nevertheless, the group is confident that it is well placed to weather the difficulties ahead and remain a sustainable entity in the long term,” it said.
“The group capital expenditure in hyperinflation terms amounted to ZWL$13,14 billion and focused mainly on projects to increase capacity and improve plant services. There are some significant capital projects currently being reviewed by management and should funds become available, it is our intention to implement them.”
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The sales volumes for the full year at Hunyani Paper and Packaging improved by 13,4% compared to prior year. The improvement was due to firm demand for tobacco cartons throughout the year, on the back of a record tobacco crop and improved regional demand.
Demand at cartons and labels division was 1,4% ahead of prior year, somewhat curtailed by raw material constraints.
Mega Pak sales volumes decreased by 2,5% versus prior year mainly due to severe power outages throughout the year in Ruwa, which hampered its ability to produce at full potential.
CarnaudMetalBox reported an increase in sales volumes of 4,7% compared to the prior year.
During the year, the group achieved sales for the year in inflation-adjusted terms of ZWL$573,78 billion. Trading income stood at ZWL$114,51 billion.
The profit before tax takes into account other material income of ZWL$71,19 billion and a net monetary loss on hyperinflation of ZWL$67,31 billion.
Other income, in the main, comprises exchange gains on foreign currency-denominated debtors and cash balances.
A profit before tax of ZWL$118,32 billion was recorded during the period.
The comprehensive profit attributable to shareholders amounted to ZWL$51,55 billion, while earnings per share at ZWL$6 822,52 cents improved on prior year.
