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Last week Nampak reported a 48% decline in headline earnings per share to 107.6c for the year ended September 30 adversely impacted by abnormal foreign exchange losses, higher interest costs and a higher tax rate. The group’s revenue rose 11% to R19.1-billion, while group trading profit was up 4% to R1.9 billion. The performance was owing to good trading in Nigeria and Zimbabwe. Earlier in the year CEO Andre dr Ruyter announced that the group was undergoing a cost cutting strategy and scraped its half-year dividend and would also reduce its property portfolio to cut debt which has grown to R7.4 billion from R16 million (2011). Significant achievements were made in strengthening the balance sheet with R1.7 billion cash raised through the sale and leaseback of fifteen South African properties.
The Angolan kwanza depreciated by 23% and the Nigerian naira (naira) by 58% against the USD. As a result, the translation of the restricted cash to the ZAR at the ruling official exchange rate, resulted in the group incurring R681 million (2015: R161 million) in foreign exchange losses with Nigeria contributing the majority of this loss.
Management did highlighted that the group faces subdued growth, volatile currencies due to lower commodity prices, drought and tightening global financial conditions to continue in the short term. Nampak has decided not to declare a final ordinary dividend, rather focusing its efforts on further enhancing its resilience in the face of continued macro-economic uncertainty.
Source: JSE SENS
Share price has failed to hold the triangle consolidation, with the move exaggerated by their released results last week.