Nampak

  • Nampak released their annual results this   week. The company reported a loss of R4.3bn for the 12 months ended 30 September   2020. However, this included R4bn of non-cash impairments, mainly attributing   to the Nigerian and Angolan operations.

  • The COVID-19 epidemic   negatively impacted all of their operations which were affected by hard   lockdowns in all of their territories. The reduced economic activity caused   revenue to decline by 23% to R11.3bn while trading profit was down 56% to   R682m for the year.

  • Despite the difficult   trading period, Nampak was still cash flow positive from their operations.   Management was also able to sell non-core assets worth R1.6bn during the year   which allowed them to pay back R1.8bn worth of debt.

  • The banks have relaxed their covenants for Nampak, which allows Nampak a grace period to improve their operations in the year ahead, negating the short-term requirement of a rights issue. If Nampak can manage their cash flows appropriately, the worst days may be behind them.

Nampak