Nampak Zimbabwe has reported a solid rebound in profitability and a sharp improvement in cash generation for the full year ended September 2025, defying a difficult operating environment marked by rising competition, customer self-manufacturing and periodic power supply constraints.
The packaging group delivered a comprehensive profit of US$7,81 million, a dramatic improvement from US$1,74 million the previous year, while cash generated from operating activities surged 62 percent to US$8,94 million.
The business closed the year ungeared, carrying US$6,76 million in cash, up from US$1,86 million in 2024.
Group managing director John Van Gend described the year as challenging, but ultimately encouraging, noting that the business managed to stabilise performance through efficiency gains and disciplined cost management.
“We operated in a highly competitive market where some customers shifted to producing their own packaging,” he said.
“Despite this, we strengthened our cash position, improved our operational efficiency, and maintained a competitive footing across our segments.”
Group sales volumes for the year fell by 5 percent, largely due to reduced orders in the commercial packaging category as several customers invested in in-house packaging manufacturing. The pre-forms market also remained under pressure, contributing to a softer performance in the plastics division.
However, an improved 2025 tobacco crop and higher demand for HDPE packaging helped narrow the volume gap.
The group recorded US$93,16 million in sales, down from US$101,28 million in the previous year.
Trading income before adjustments fell to US$10,81 million from US$16,39 million, reflecting the volume downturn and an increasingly crowded competitive landscape.
Profit before tax came in at US$11,21 million, compared to US$14,98 million last year. Management highlighted the sharp drop in exchange gains – US$0,42 million compared to US$4,66 million in 2024 – as a key driver of the lower PBT.
Mr Van Gend said the business remained focused on staying agile in response to market shifts.
“We continue to pursue new opportunities to improve our product offering,” he explained.
“Our priority is to build a business model that can withstand volume fluctuations while keeping us responsive to customer needs.”
While earnings softened at operating level, the business delivered its strongest cash performance in several years.
Cash generated from operations before working capital changes rose 28 percent to US$13,56 million, while cash generated after financing activities climbed to US$5,21 million, up from just US$0,34 million last year.
Short-term liquidity improved significantly, with the current ratio rising to 2,9 times, up from 2,2 times. The net asset value per share increased 28 percent to 4,73 US cents.
Mr Van Gend said the improved cash position enhances Nampak’s capacity to reinvest for growth.
“Our ungeared balance sheet and strong liquidity give us flexibility,” he said. “This allows us to support our capital expenditure pipeline and maintain the resilience of our operations.”
Hunyani Paper and Packaging posted a 3 percent decline in full-year sales volumes as commercial carton demand dipped amid customer self-manufacture.
However, tobacco packaging performed strongly, buoyed by a larger crop, while the horticulture sector delivered additional gains.
In the Plastics and Metals segment, Mega Pak recorded a 9 percent drop in sales volumes. Competition in PET pre-forms intensified, and the company continued to face prolonged power outages at its Ruwa facility.
“These power challenges hampered our ability to operate at full potential,” Mr Van Gend noted.
“We are mitigating the pressure through efficiency improvements and targeted investments.”
Capital expenditure for the year amounted to US$3,62 million, slightly above last year’s US$3,50 million, directed mainly at capacity expansion and plant service improvements.
Management is reviewing several large projects aimed at boosting capacity on key production lines.
The group chose not to declare a dividend, prioritising cash conservation to fund the CapEx programme.
Nampak Zimbabwe expects the operating environment to remain competitive but believes its strengthened financial position provides a platform for sustained progress.
Mr Van Gend said management would continue refining the business model to maintain resilience.
“We are focusing on capital allocation strategies that increase our capacity and position us to take advantage of growing demand,” he said.
“Despite the pressures of the past year, we remain confident in the business’s ability to stay competitive.” – Herald
