Nampak half-year revenue climbs 7%

Nampak, a leading packaging company, has reported a 7 per cent rise in half-year revenue as it continues its journey of transformation and restructuring. The CEO of Nampak, Phil Rouw, spoke to CNBC Africa about the company's progress and future outlook. Rouw expressed that while significant progress has been made in the transformation journey, the work is ongoing and the job is never truly done. One of the key aspects that required attention was the divestiture program, which saw successful rights offers and shareholder approvals. The company also focused on cost production and right-sizing to improve both the balance sheet and income statements. The combined efforts resulted in a strong free cash flow generation for Nampak. Rouw highlighted the divestiture program, including the exit from Nigeria and potential sales of interests in Angola and Zimbabwe. While the divestiture program aims at creating a highly focused metals business, Rouw mentioned that selling Zimbabwean interests is currently paused due to the country's volatility, despite it being a profitable venture. The company is also considering expansion possibilities in Angola due to its strategic location and profitability. In terms of challenges faced during the restructuring process, Rouw clarified that a reported issue with tax authorities in Zimbabwe was a misunderstanding. Nampak is waiting for a refund owed by the authorities and has appointed a specialist agent to handle the process. As the company focuses on optimizing its core businesses, Rouw mentioned the potential for organic growth and future inorganic opportunities once the balance sheet targets are met. Regarding the South African business environment, Rouw acknowledged the positive indicators like uninterrupted power supply, increasing consumer and business confidence. However, Rouw emphasized the need for sustainable growth and consumer benefits to materialize over time. He also addressed the power situation, stating that while it hasn't greatly impacted Nampak, municipal failures have caused sporadic downtime at some facilities. Looking ahead to the next six months, Rouw remains cautiously optimistic amid political uncertainties in South Africa. With hopes for a future government of national unity and a conducive business environment, Rouw believes that the country will attract global interest and experience strong capital formation. Despite the challenges, Rouw's outlook remains positive, citing the country's resilience in overcoming turmoil in the past. As Nampak continues its transformation journey and navigates through restructuring, the company's focus remains on optimizing core businesses, generating free cash flow, and preparing for potential growth opportunities in the future.