Nampak’s dividend payouts curtail Q1 capex

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NAMPAK Zimbabwe (Nampak) saw a reduction in spending for the first quarter ending December 31, 2023 owing to lower cash levels from last year’s two interim dividend payouts.
In FY 2023, Nampak spent $13,14 billion on capital expenditure focused mainly on projects to increase capacity and improve plant services.
The country’s leading packaging product supplier earlier indicated that it is reviewing significant capital expenditure projects and should funds become available, looks to implement them.
“Capital expenditure for the three-month period was curtailed largely as a result of the reduced cash balances following the repayment of the two interim dividends declared last year,” Nampak’s group managing director, John Van Gend, said in a trading update

“Net working capital increased due to an increase in inventory. The group closing cash balance was $19,4 billion at the end of Q1 2024,” he said adding that “most of this cash balance will be applied towards stock replenishment and the settlement of trade payables.”
During the quarter ended December 31, 2023, Nampak was not spared from the impact of inflationary pressures in the market.
“The order book across the group remained firm particularly for the paper products and preforms, however, inflationary pressures saw an increase in the cost base,” Van Gend said.
He said the shift in turnover mix towards more US dollar-denominated transactions helped maintain margins for the period under review.
Transactional dollarisation is poised to expand as economic actors try to protect value and hedge against currency risk in a high inflationary environment.
Van Gend said the period under review, was negatively affected by exchange rate volatility and power shortages mainly at the Ruwa plant as well as a ZESA fault at CMB in December which lasted for two weeks.
“The ongoing disruptions in power supplies at Ruwa, resulted in the increased usage of generators which in turn caused disruptions on production lines due to the quality of power supplied,” he said.
During the quarter, Nampak group volumes were eight percent ahead of prior year with total volumes across all the business units ahead of prior year.
Van Gend said some product categories such as metals were behind prior year mainly due to raw material shortages over the period under review.
During the quarter, revenue for the group rose 19 percent to $172,5 billion compared to the comparative period driven by volume increases in the business units and inflationary pricing.
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