Nampak swings to R3.5bn profit as asset sales slash debt and stabilise balance sheet

Key topics:Asset disposals drive R3.5bn profit and cut net debt by more than halfStrong operating recovery in SA Metals and improved African cash flowsZimbabwe deal collapse and currency exposure remain ongoing risksSign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..BizNews Reporter.Nampak Limited has delivered one of the most dramatic financial turnarounds on the JSE this year, posting a R3.5 billion profit for 2025 after years of restructuring, shrinking foreign exposure and large-scale asset disposals. The packaging group’s annual results for the year ended 30 September 2025 show a business that has aggressively cleaned up its balance sheet, strengthened cash generation and stabilised its South African core—though legacy issues in Zimbabwe and African currency risks continue to weigh.The group’s profit attributable to shareholders surged from a R372.6 million loss in 2024 to R3.5 billion, translating into basic EPS of 41,756.8 cents, a remarkable reversal largely driven by the successful execution of its asset disposal programme.A central pillar of the recovery is the dramatic reduction in leverage. Net debt (excluding lease liabilities) fell by half to R2.1 billion, compared with R4.4 billion a year earlier. Including lease liabilities, net debt declined from R5.3 billion to R2.9 billion—cutting the group’s interest burden and moving it closer to a more sustainable capital structure. Management says deleveraging remains pivotal to restoring an investment-grade profile and lowering funding costs.Operationally, Nampak’s continuing businesses delivered solid growth. Revenue rose 8% to R10.7 billion, while profit from continuing operations nearly doubled to R1.16 billion from R625.6 million in 2024. HEPS, a core measure of underlying performance, jumped to 12,089.4 cents (R1 billion), up from 1,378.0 cents the prior year, reflecting both improved profitability and the absence of the heavy foreign-exchange losses that previously plagued its African operations.Cash generation also strengthened sharply. Cash from operations before working-capital movements rose 38% to R2.2 billion, driven by improved earnings in the South African Metals division and reduced forex losses in Angola and Nigeria. Total cash holdings increased from R553 million to R1.4 billion.Nampak also reported encouraging signs from Angola, historically one of its most volatile markets. A rebound in domestic demand helped the Beverage Angola business record a R354 million impairment reversal, signalling improving operational health and cash generation.Governance assurances were equally robust. External auditors PwC issued an unmodified opinion, confirming the financial statements fairly presented the group’s position. Directors further noted that internal controls and risk management systems were adequately maintained throughout the year.Disposals lift results—but underline one-off nature of the recoveryWhile the headline profit is eye-catching, much of it stems from accounting gains linked to major disposals. The net profit on disposal of discontinued operations totalled R2.4 billion, boosted heavily by the R2.4 billion recycling of the foreign currency translation reserve following the sale of Nampak Bevcan Nigeria—a non-cash gain that inflated the bottom line.The group’s asset-sale programme, however, was not without setbacks. The planned disposal of Nampak Zimbabwe Ltd (NZL) collapsed after the purchaser withdrew and shareholder approvals were not secured. NZL remains classified as “held for sale”, leaving Nampak exposed to Zimbabwe’s hyper-volatile operating environment. The country’s Reserve Bank has also failed to service its legacy-debt financial instrument, with no payments received during 2025.Working-capital absorption also reflected the costs of unwinding discontinued operations, with disposals consuming R266.6 million and contributing to a total net working-capital outflow of R153.4 million for the year.Management again withheld ordinary dividends despite the balance-sheet improvement, saying capital preservation remains a priority. Preference share dividends continue as normal.The group also acknowledged a significant concentration risk: a single customer in the Metals South Africa division accounted for 20.2% of total external revenue. And despite reduced debt, Nampak remains exposed to Angolan kwanza fluctuations, with most Angolan balances unhedged.A cleaner balance sheet—yet challenges lingerNampak’s 2025 numbers reflect a company that has executed a sweeping financial clean-up, offloading non-core assets to stabilise the business and strengthen its remaining core operations. Underlying profitability has improved meaningfully, though the exceptional disposal gains mean the headline profit is unlikely to be repeated at similar levels.Legacy issues in Zimbabwe and African currency exposure continue to pose risks—but for the first time in years, the group’s foundations appear materially stronger..Read the results in full by downloading the PDF below

Nampak swings to R3.5bn profit as asset sales slash debt and stabilise balance sheet

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