Nampak Surges as Can-Maker Extracts More Cash From Nigeria

JOHANNESBURG (Capital Markets in Africa) – Nampak Limited rallied the most on record after Africa’s biggest beverage-can maker said it significantly improved its ability to get cash out of Nigeria while increasing the use of hedging contracts to protect against currency fluctuations.

The Johannesburg-based company expects to get $54 million out of Nigeria by the end of September, Chief Financial Officer Glenn Fullerton said by phone. The combined rate at which Nampak extracted money out of Nigeria and Angola improved to 80 percent in the fiscal first-half from 77 percent at the end of September last year, while it hedged 61 percent of its cash positions from 50 percent at the end of the fiscal year.

“Nampak has demonstrated that liquidity out of Nigeria is becoming a reality,” Chief Executive Officer Andre de Ruyter said. “Angola and Nigeria are growth markets and we are well positioned to take advantage of that. We now have a channel to get money out.”

Nampak has hired a senior manager to focus on moving money from the two countries, where foreign-exchange shortages have hampered the ability of companies to repatriate earnings. Nampak earlier reported a 16 percent increase in net income in the six months through March, while the CEO said the company will reconsider paying dividends at the end of the financial year after withholding the interim payout to conserve cash.

The shares climbed 15 percent, the most since Bloomberg began compiling data in 1990, to 21.85 rand. It was the best performer on the FTSE/JSE Africa All Share Index on Tuesday and boosted the company’s market value to 15.1 billion rand ($1.2 billion).