May 28 (Bloomberg) -- Nampak Ltd., South Africa’s biggest packaging company, said profit in its home market declined 20 percent as weaker consumer spending offset growth in the rest of Africa. The shares fell the most in more than 15 years.
Operating profit before one-time items in South Africa fell to 570 million rand ($58.7 million) in the six months through March, compared with 711 million rand a year earlier, the Johannesburg-based company said in a statement today. Revenue in Africa’s biggest economy advanced 4 percent, compared with 19 percent in the rest of the continent.
The shares fell 13 percent to 32.53 rand at the close in Johannesburg, the biggest decline since October 1997, paring gains for the year to 2.1 percent.
“They didn’t provide guidance on how bad things are in South Africa,” Mark Hodgson, an analyst at Cape Town-based Avior Research Pty Ltd., said in a phone interview. “Clearly there is a lot of margin pressure coming in.”
The South Africa profit fall was “primarily due to lower selling prices agreed in the metals and glass businesses to secure long-term supply contracts,” Nampak said. “The rest of Africa is expected to continue generating good results but the downturn in consumer spending in South Africa is anticipated to continue.”
South Africa’s economy grew by an annualized 0.9 percent in the first quarter, the slowest pace since a 2009 recession, as manufacturing output slumped.
Nampak total first-half profit increased 16 percent to 775.2 million rand, while the company raised the half-year dividend by 4 percent to 42 cents a share.
Chief Executive Officer Andrew Marshall will retire from the company in March 2014 after five years in charge, Nampak said.
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