Nampak Zimbabwe : NPKZ.zw | Q3 2026 Trading Update

Nampak

quality distinction

TRADING ENVIRONMENT

The operating environment remained relatively stable during the quarter under review supported by a stable Zimbabwe Gold (ZWG) and subdued inflation levels. Notwithstanding these positive developments, tight management of ZWG liquidity continued to drive a greater proportion of transactions towards the US Dollar.

Electricity supply remained unreliable, particularly in Ruwa, resulting in increased reliance on generator power to sustain production and meet customer demand. This has placed additional pressure on operating costs across the business.

Furthermore, geopolitical tensions in the Middle East have contributed to volatility in fuel and raw material prices, adversely affecting margins across all business units.

BUSINESS AND FINANCIAL PERFORMANCE

Group revenue for the nine months to 30 June 2026 reached US$67,8 million, representing growth of 9% compared to the prior year. While overall sales performance improved, metal packaging volumes remained below prior-year levels, and commercial carton volumes continued to be impacted by certain customers transitioning to in-house manufacturing capabilities.

Group volumes for the nine months ended 30 June 2026 were 16% above the prior year mainly through a substantial carryover from the prior year of late-season tobacco case orders from the local tobacco industry in the first quarter.

Group volumes for the third quarter were 4% higher than the prior year, driven by improved demand across the plastic and tobacco packaging categories. However, metal packaging volumes declined significantly compared to the prior year because of subdued market demand and raw material supply chain disruptions. Volumes are, however anticipated to improve modestly across all the business units in the final quarter of the financial year.

Despite the revenue performance, profitability remains under pressure through rising costs and competitive market pricing to compete effectively given changed market dynamics.

PRINTING AND CONVERTING SEGMENT

Hunyani Paper and Packaging Volumes at Hunyani Corrugated Products division for the nine months ended 30 June 2026 were 26% above prior year, supported by a larger tobacco crop that increased carton volumes demand in the first quarter.

Volumes for the third quarter were consistent with the prior year. Sales volumes in the tobacco sector increased by 3% compared to the same period last year, supported by higher carry-over demand. Demand is expected to remain resilient through to the end of the tobacco season.

Commercial carton volumes for the quarter were 9% below the prior year, primarily due to certain customers transitioning to in-house manufacturing.

The Cartons, Labels and Sacks division’s sales volumes for the third quarter were 8% below the prior year and year to date 5% lower. The division continues to focus on improving operational efficiencies to become more competitive.

PLASTICS AND METALS SEGMENT

Mega Pak

Volumes for the nine months ended 30 June 2026 were 8% above prior year reflecting the positive impact of increased demand in the quarter under review.

Third quarter sales volumes increased by 14% compared to the prior year. The benefit of volume recoveries across all the product categories was partly offset by margin compression to remain competitive. Operations were further impacted by increased power outages in Ruwa.

Although investment in generators has helped mitigate production disruptions, the business unit’s ability to pass on these costs was constrained due to competitive pressures. Management continues to pursue sustainable and cost-effective energy solutions to improve power reliability and reduce operating costs.

CarnaudMetalbox Volumes for the 9 months ended 30 June 2026 were 4% above prior year as the business recovered from extended production related stoppages in the first quarter.

Sales volumes in the third quarter increased by 14% compared to the prior year. While metal packaging volumes remained significantly below prior year levels, HDPE volumes grew by 33%, benefiting from strong customer demand and capacity enhancements implemented during the quarter under review.

DIRECTORATE

There were no changes to the Board of Directors during the period under review.

OUTLOOK

Heightened geopolitical tensions in the Gulf region together with the ongoing Russia-Ukraine conflict are expected to sustain operating costs pressure across all the business units in the medium term. In addition, the recent anti-immigrant demonstrations in South Africa may negatively affect regional economic activity through increased repatriation of foreign nationals and disruption to diaspora remittance flows.

Despite these challenges, the Group expects to benefit from the larger tobacco crop, within the paper segment, as well as continued volume recovery in the plastics segment. Management remains focused on strengthening operational efficiency, optimising costs and enhancing cash generation to support sustainable business performance and profitable growth. The group remains ungeared.

Shareholders of Nampak Zimbabwe Limited (NZL) are reminded that its ultimate parent company, Nampak Limited, continues to classify its 51.43% shareholding in NZL as an asset held for sale while discussions with potential acquirers remain ongoing.

SIYAKA building print excellence…

By Order of the Board

J P Van Gend 68 Birmingham Road

Group Managing Director Southerton 5 August 2026 Harare
Directors: A. H. Howie (Chairman), J. P. Van Gend* (Group Managing Director), M. Matafeni* (Group Finance Director), A. Aldridge, S. H. Murray, M. Valela (A. Makamure, Alt) * Executive Directors

P O Box 4351, Harare, 68 Birmingham Road, Southerton, Harare, Zimbabwe. Telephone 662730/9, 0772192291/3.