Megapak weighs down Nampak | Business Times

BUSINESS REPORTER

 

Megapak, a division of Nampak Zimbabwe Limited, that manufactures plastic packaging products, weighed down the group’s volume performance in the nine months leading up to June 30, 2023, Business Times can report.

According to Nampak managing director John Van Gend, the crippling power outages during the reviewed period were to blame for Megapak’s lower volume.

“Although, the third quarter volumes  were marginally up compared to the prior year period, the gain was weighed down  by lower volumes  at Megapak which continued  to be affected  by the increasing frequency of  power cuts at the Ruwa plant,” Van Gend said.

Moreover, he claimed that the liquidity crisis in the  market had an impact on trading, leading to an increase in the number of domestic transactions that were conducted in foreign currency.

“The group has benefited from improved United States dollar collections in the quarter on the back of constrained Zimbabwe dollar dollar liquidity (crisis), most of which was deployed into working capital to meet customer demand. The group remains profitable despite the inflationary pressures pushing up the cost base,”  Van Gend said.

Revenue for the group in the nine months to June  grew 41% to ZWL$413.2bn  compared to the prior year period.

Van Gend said inflationary pricing and marginal volume improvements were the major contributors to the revenue growth.

At the end of June, the group’s cash balance was ZWL$24.6bn , largely as a result of export revenue received at the end of the month.

The majority of this balance was used to pay trade payables as well as replenish stock.

The period  under review was characterised by currency volatility resulting in inflationary pressures being felt across all the market segments.

Sales volumes at Hunyani Corrugated Division were 5% up on the prior year period.

Sales volumes into the tobacco market were 12% ahead of the same period last year due to an improved tobacco crop in the year.

Although demand for commercial carton volumes remains firm, volumes were 12% down on the prior year period due to constrained raw material supplies.

The cartons, labels and sacks division sales volumes for the third quarter were 7% up on prior year due to improved demand for tobacco paper wrap.

Other commercial packaging was in line with the prior year volumes for the third quarter.

Volumes at the CarnaudMetalbox were 9% above the same period last year.

Plastics led the recovery buoyed by higher HDPE bottle volumes, which were 36% above the prior year period.

However, metals volumes were 17% down on prior year, whilst closures were 4% down on the same period last year.

 

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