NamPak Zimbabwe benefit from high temperatures
NAMPAK Zimbabwe limited benefited from high temperatures between October and December last year and a carry-over from the 2015 tobacco crop in 2016 to record a profit after tax of US$1,5 million for the six months to March 2016 from US$173 000.
Group revenue during the interim period was four percent ahead of prior year at US$47,5 million from US$45,7 million.
The company however said weaker exports and price reductions due to the weakening of regional currencies could affect their revenue going forward.
At present there is proliferation of imported products, particularly coming out of South Africa and Zambia, as both the rand and Zambian kwacha have seen material devaluations over the last 12 months.
In a statement accompanying the group’s financial results on Monday, the group said all units traded profitably, with treasury and cash flow management remaining a key focus area for the company.
“The group has spent US$2,7 million for the purchase of plant and machinery to enhance capacity…The cash resources are expected to be utilised to fund future capital expenditure projects and to reduce long term debt. In view of this the directors have decided not to declare a dividend,” said the group in a statement.
The long term borrowings relate to shareholders loan from the parent company, Nampak International Limited with interest rates of 5,52 percent per annum and are unsecured.
The short-term borrowings comprise the current portion of the shareholders loan of US$2 million which have an interest rate of US$5,52 percent per annum and are unsecured and US$580 000 from a local financial institution which is secured by a negative pledge of assets of properties and has an average interest rate of 7,5 percent per annum.
Going forward, the company is cautious as to how much the drought will affect the tobacco crop, and as a consequence the demand for tobacco boxes.
The downside of this weather has been the drought now being felt, and this is going to have a negative impact on the economy this year and as a result could negatively affect the company’s performance.
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