Nampak loses nearly R2bn amid crisis in Zimbabwean currency

Cans of Coca-Cola Co. brand Coke carbonated soft drink move along a conveyor at the Moon Beverages Ltd. Coca-Cola Happiness Factory in Greater Noida, Uttar Pradesh, India, on Monday, March 25, 2019. Coke's hunt for health-conscious alternatives in India has led it to tap into a rich vein of what’s known as “ethnic drinks” -- traditional beverages brewed by grandmas in kitchens around the country using local spices and fruits. Photographer: Sumit Dayal/Bloomberg

The share price of packaging group Nampak fell to a more than two-decade low on Monday, after it warned headline earnings had plummeted in its year to end-September due to a R1.9bn foreign-exchange loss in Zimbabwe.

The company’s share price slid as much as 10.8% in morning trade on Monday, with the group also warning it seen higher than anticipated effective tax charges during the period.

This was due to legislative changes in Angola that capped the deductibility of foreign-exchange losses.

The group, which has a market capitalisation of R4.6bn, expects a headline loss for continuing and discontinued operations of between 18.9c and 19.9c, from headline earnings per share of 173.3c previously.

The company also expects a loss per share from continuing and discontinued operations of between 129.5c and 136.1c, from earnings per share of 76c previously.

Headline earnings per share exclude capital profits, but include foreign-exchange losses. Earnings per share include capital profits, as well as asset impairments.

The company has previously warned currency volatility in Angola and Zimbabwe were significantly weighing on its performance.

This was part of the reason it opted not to resume dividend payments for its six months to end-March, although finalisation of the disposal of its glass business was also a factor.

In September, the company announced it had sold that business to Isanti Glass 1 for R1.5bn, an entity 60% held by black-owned investment company Kwande, and 40%-owned by a subsidiary of AB InBev.

At 1.43pm Nampak’s share price was 6.56% lower at R6.70, having earlier fallen as much as 10.8% to R6.39, its worst level since December 1998. – Business Day