Nampak Limited - Press release

Registration number 1968/008070/06
(Incorporated in the Republic of South Africa)


NAMPAK HIT BY SQUEEZE ON MARGINS


The overhang of substantial raw material price increases, falling volumes,
excess industry capacity and abnormal costs all combined to depress profits
and operating margins in the half year ended 31 March 2001.  Headline
earnings per share fell by 34% but if restructuring and abnormal costs are
excluded the drop was limited to 21%.


Total turnover increased by 16% to just over R5,3 billion assisted by the
acquisition of Plysu in Europe but operating profit before abnormal items
declined 7% to R439 million.


Deputy Chairman and CEO, Trevor Evans, said that the trading difficulties
and abnormal costs affected mainly the South African packaging operations
with NamITech, Europe and the rest of Africa showing satisfactory growth in
operating profits.


Profitability in the metals sector declined mainly as a result of lower
beverage industry demand and ongoing pressure on selling prices.  Increased
fish can demand and a better agricultural season helped Foodcan whilst
Divpac benefited from some improvement in its markets together with gains
from the recent aerosol manufacturing investment and rationalisation of its
operations.


In the paper sector both Corrugated and Printpak were negatively affected by
pressure on margins as a result of higher raw material prices and lower
demand.  Tissue lost some market share in a bid to increase selling prices
in order to recover the substantial increase in raw material costs.  Paper
Merchants were able to limit their decline in profitability following the
major restructuring programme completed last year.


Evans said that the merger of Plysu and BlowMocan has largely been

successfully completed and the combined business now trades as Nampak plc.
On an annual basis this business contributes to the group's earnings after
charging interest on the funds raised for the acquisition of Plysu.  Nampak
plc is currently involved in some large in-plant capital projects for UK
dairy customers and these are expected to contribute to earnings and cash
flows in the coming years.  No adverse impact is expected from the foot-and-
mouth crisis currently being experienced in the UK.


The South African plastics packaging businesses were negatively affected by
unrecovered raw material prices as well as the depressed state of the local
beverage market.  Rotoflex improved profitability on the strength of better
volumes whilst Sacks did not meet expectations due to lower volumes and
margins and some initial inefficiencies following the consolidation of three
factories into a single manufacturing unit.


Evans said that NamITech continued to expand its range of secure technology
solutions throughout Africa and achieved strong growth in both turnover and
profitability. The acquisition of Velocit-e will further enhance its

technological leadership position and provide more opportunities for growth.


Looking ahead to the remainder of the year, he said that trading in the
second half is expected to be marginally better and some of the benefits of
the cost reduction programme will start to flow through to the bottom line.
Evans noted however that neither is expected to be sufficient to offset the
under-performance in the first half.


With further substantial restructuring costs still to come in the second
half, a decline in earnings for the full year is anticipated but at a lower
rate than in the first half.


Satisfactory profit growth is however projected to resume in the 2002
financial year following improved trading conditions and the conclusion of
the restructuring programme, he concluded.



14 May 2001
Produced and released by Nampak Limited

For further information please contact Trevor Evans on +27 11 7196363