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Johannesburg - Nampak, Africa’s biggest manufacturer of beverage cans, said first-half profit fell 13% as declining margins at its South African unit offset gains elsewhere in the continent. The shares dropped.
Net income for the six months through March declined to R644.7m from R740.1m a year earlier, the Johannesburg-based company said Tuesday in a statement. The average margin on trading profit in South Africa fell to 6.9%, from 10.7% a year earlier, while the company’s overall margin was 9.8%.
Nampak is working to reduce operating costs while expanding in other African countries as weak economic growth in its home market squeezes profits. South Africa’s economy grew at a slower pace in the first quarter, the statistics office said in a report on Tuesday, as power cuts curbed factory output and a drought cut harvests, undermining job creation.
“The South African business environment is expected to remain challenging in 2015,” Nampak said in the statement. The company’s plan to accelerate growth in the rest of the continet “remains intact".
Nampak shares dropped 9% to R38.21 as of 14:05 in Johannesburg, the biggest intraday slump since May 2013. The stock has declined 12% this year, compared with a 7.8% gain in the 170-member FTSE/JSE Africa All-share index.
South Africa accounted for 44% of the company’s trading profit, compared with 53% a year earlier.
