NAMPAK LIMITED - Summarised consolidated financial results for the six months ended 31 March 2018

Release Date: 30/05/2018 15:00
Code(s): NPK
 
Wrap Text
Summarised consolidated financial results for the six months ended 31 March 2018

Nampak Limited
(Incorporated in the Republic of South Africa)
Registration Number: 1968/008070/06
Share Code: NPK 
ISIN: ZAE000071676
(“Nampak” or “the Company”)

Summarised consolidated financial results
For the six months ended 31 March 2018

Highlights
* Revenue increased to R8.8?bn up by 2%
* Trading profit increased to R1.2bn up by 7%
* HEPS increased by 10% to 132.0 cents per share
* R1.3bn (USD97.6M) cash extracted from Nigeria, Angola and Zimbabwe
* Operating profit decreased to R1.0bn down by 6%
* Net gearing improved to 39% from 51% — financial position further 
  enhanced

Nampak’s CEO, André de Ruyter, commented “Our performance from continuing 
operations is pleasing in a mixed economic and political environment. All 
our beverage can making operations and plastics in the Rest of Africa 
achieved pleasing results while the rest of the group delivered a 
satisfactory performance under adverse conditions, characterised by 
reduced demand, particularly prior to December 2017.

Our focus on strengthening our financial position and prudent capital 
allocation has resulted in improved cash generation, reduced gearing and 
improved margins. We are intent on ensuring we have a solid foundation 
on which to grow our operations. Management and the Board will continue 
to operate the business in order to build a sustainable, profitable 
business in which shareholder returns are optimised.”

Commentary

Revenue from continuing operations grew by 2% and trading profit rose by
7% as a result of robust demand in the Metals and Plastics Divisions’ 
performance in the Rest of Africa. Nampak’s headline earnings and headline 
earnings per share (“HEPS”) for continuing operations increased 11% and
10% to R849 million (2017: R767 million) and 132.0c (2017: 119.7c)
respectively.

Cash extraction improved significantly as the introduction of the Nigerian 
Autonomous Foreign Exchange (“NAFEX”) market in April 2017 enabled further 
extraction of USD74 million from Nigeria for the six months to March 2018, 
improving the extraction rate to 137% from 80% in the comparative period 
and reducing the cash balance by 57% from R955 million to R410 million. 
Hedging in Angola also improved to 95% from 77% in March 2017.

The results were impacted by the South African Rand (“Rand”) which 
was on average 6% stronger versus the US dollar for the six month period and 
13% stronger as at the end of the period compared to 30 September 2017. This 
meant the translation of revenue growth in the Rest of Africa was moderated. 
Net gearing at 31 March 2018 benefitted from the firmer Rand, however, the 
statement of other comprehensive income reported adverse unrealised foreign 
exchange differences on translation of foreign operations amounting to 
R665 million. Despite net gearing being managed to the lower levels of the 
group’s targeted range, cash extraction from Angola and Zimbabwe was less 
than satisfactory and remains a key focus area.

Good progress has been made in improving key foundational operating 
practices at our Glass Division. Pack-to-Melt ratios have stabilised at 
reasonably satisfactory levels, and further improvements are expected as 
newly introduced skills and practices gain traction. As required by 
International Financial Reporting Standards, rigorous impairment tests 
were carried out on the Glass Division. The results of these tests, as 
verified by our external auditors, indicate that no impairment is 
required, and that sufficient headroom exists.

Following a careful review of the Glass business, challenges in 
leveraging economies of skill and scale, and its significant capital 
requirements going forward, the Board decided to dispose of the 
operation in order to free up cash for other uses, including growth, 
debt reduction and enhancing free cash flow. Accordingly, Glass has 
been accounted for as a discontinued operation separately in the group 
statement of comprehensive income with associated assets and liabilities 
being grouped together and separately disclosed on the face of the 
statement of financial position. Exploratory discussions have been held 
with a number of strategic players in the packaging industry and a 
formal disposal process is in its initial stages. We expect to conclude 
the transaction by the first half of the 2019 financial year.

Financial performance from continuing operations

R million                                        H1 2018  H1 2017 % change
Revenue                                            8 845    8 668       +2
Trading profit                                     1 164    1 085       +7
Net abnormal (losses)/gains                         (121)      24    (>100) 
Operating profit                                   1 043    1 109       (6) 
Net profit for the period                            871      896       (3) 
Earnings per share (cents)                         129.4    127.4       +2
Headline earnings per share (cents)                132.0    119.7      +10
Cash generated from operations                       576      524      +10

Revenue and trading margins

Revenue improved by 2% driven by a strong performance in the Metals 
Division. Bevcan in South Africa and Nigeria experienced pleasing sales volume 
growth and DivFood recovered from low fish can volumes in the comparative 
period. Trading margins were also positively impacted as trading profit 
rose by 7%. Pleasing volume growth in Bevcan Angola was abated by a much 
stronger Rand to the US dollar, which resulted in a modest increase in 
revenue. While the Plastics Division revenue was flat, strong growth in 
the Rest of Africa mitigated volume losses experienced in South Africa 
and Europe and contributed significantly to overall margin improvement. 
The rationalisation of the Paper Division also contributed towards 
improved trading margins for the group of 13.2% from 12.5% in the prior 
period.

Abnormal items and operating profit

Abnormal losses for the period are largely attributable to foreign
exchange losses of R75 million from the devaluation of the Angolan 
kwanza. A further R21 million loss was attributable to the cost of 
repatriating cash from Nigeria. Net impairments of R26.6 million are 
largely attributable to the European business while retrenchment costs 
contributed to the 6% reduction of operating profit to R1.0 billion. 

Taxation
The effective tax rate for the period improved to 9.0% from 9.7%. 
Bevcan Nigeria’s pioneer status expired on 31 December 2017 and the 
tax rate going forward is expected to increase gradually once 
accumulated tax allowances have been fully utilised in Nigeria. The 
2019 tax rate is expected to rise as the tax holiday for Bevcan Angola 
comes to an end on 30 April 2019. The tax rate for the full year may be 
impacted by relative contributions from Nigeria and Angola, but, as 
required by accounting standards, the rate communicated for the half 
year is expected to prevail for the full year. The tax rate is lower 
than previously communicated to the market due to significantly 
improved cash extractions from Nigeria.

Net earnings

Headline earnings, which exclude capital items, grew 11% to R849 
million resulting in headline earnings per share for continuing 
operations of 132.0c reflecting a 10% improvement from 119.7c. Net 
profit for the period declined 3% to R871 million and benefitted 
from lower net finance costs and a lower tax rate. 

Financial position
The group’s financial position continues to improve with gearing at 
39% from 51% in the comparative period and 45% at year-end in 
September 2017. The balance sheet remains strong, with key ratios 
firmly under control and adequate facilities available to fund all 
of the group’s activities. This is largely attributable to net debt 
balances reducing by 27% to R3.8 billion from R5.2 billion resulting 
from the higher cash balances in restricted areas and the strengthening 
of the Rand against the US dollar.

Cash extraction in the Rest of Africa

The Rand equivalent of cash balances held in the currently cash 
restricted areas of Angola and Zimbabwe increased by 25% to R3.6 billion 
on the back of strong cash generation in Angola and Zimbabwe and slower 
than expected repatriation of foreign currency due to in country US dollar 
shortages. In Angola, 95% of cash is hedged and management continues to 
monitor the region closely.

Cash balances in Zimbabwe have grown to R816 million from R654 million at
30 September 2017. Following intensive engagements with customers and the
Zimbabwe Central Bank, Nampak expects to be allocated foreign currency on 
a monthly basis, as from the second half of the 2018 financial year.

Cash balances and extraction rates in Angola, Zimbabwe and Nigeria are 
as follows:

                                                                     Non- 
                                               Restricted      restricted
31 March 2018                          Angola   Zimbabwe Total    Nigeria
Cash on hand (Rm)                       2 748        816 3 564        410
Hedged cash (Rm)                        2 622         —2 2 622         —3
% cash hedged                              95         —2    74         —3
Cash extraction rate (%)1                  61          6    37        137

                                                                     Non-
                                                Restricted     restricted
30 September 2017                        Angola Zimbabwe Total    Nigeria
Cash on hand (Rm)                         2 188      654 2 842        828
Hedged cash (Rm)                          1 954       —2 1 954         —3
% cash hedged                                89       —2    69         —3
Cash extraction rate (%)1                    47       40    47         93


                                                                     Non-
                                                Restricted     restricted
31 March 2017                            Angola Zimbabwe Total    Nigeria
Cash on hand (Rm)                         1 436      426 1 862        955
Hedged cash (Rm)                          1 107       —2 1 107        344
% cash hedged                                77       —2               36
Cash extraction rate (%)1                   80                         80

1 Liquidity ratio of invoices presented for payment in the period.
2 There are currently no appropriate hedges available in Zimbabwe.
3 Cash balances in Nigeria are no longer considered restricted as a 
  consequence of the liquidity that has been provided by the introduction 
  of the NAFEX.

Foreign exchange rate movements

Nampak has sizeable operations outside South Africa and, as a result, its 
performance is impacted by various foreign currency movements. Currency 
movements for key markets are set out in the following table:

Average rates

                                    31 Mar    31 Mar        %   30 Sep
                                      2018      2017   change     2017
ZAR/GBP                              17.35     16.83       (3)   16.96
ZAR/EUR                              15.36     14.54       (6)   14.78
ZAR/USD                              12.78     13.57        6    13.38
NGN/USD                             359.75    311.69      (15)  321.90
AOA/USD                             189.76    171.73      (10)  171.74

Closing rates

                                    31 Mar   30 Sep         %   31 Mar
                                      2018     2017    change     2017
ZAR/GBP                              16.62    18.17         9    16.83
ZAR/EUR                              14.57    15.98         9    14.29
ZAR/USD                              11.86    13.56        13    13.41
NGN/USD                             360.00   358.99         —   314.29
AOA/USD                             218.64   171.75       (27)  171.73

The Angolan kwanza has been devalued through a series of controlled 
auctions by the Angolan Central Bank and has devalued by 27% at the 
end of March 2018 compared to 30 September 2017. While the strengthening 
of the Rand against the US dollar has adversely impacted the translation 
of foreign earnings for Rest of Africa territories, the translation of 
the group’s dollar denominated borrowings was positively impacted. The 
Rand’s weakened position against the Pound benefitted the European region. 
While there has been no material devaluation in the closing rate of the 
Nigerian naira since the introduction of the NAFEX market in April 2017, 
the average rate reflects a 15% devaluation against the US dollar for the 
comparative period.

The stronger Rand/US dollar rate used to mark to market other monetary 
items led to foreign exchange translation losses of R149 million, most 
of which are unrealised.

Capital expenditure

Capital expenditure for the period more than halved to R206 million from 
R470 million for the same period in 2017 as a result of more stringent 
capital allocation by management. Capital expenditure for the full year 
is expected to be similar to, if not below, the 2017 year amount of 
R735 million.

Trading performance

                                           Revenue     Trading profit
R million                             H1 2018  H1 2017  H1 2018 H1 2017
Metals                                  5 849    5 570      925     883
Plastics                                2 393    2 400      121      89
Paper                                     603      698       78      57
Corporate services                          —        —       40      56
Continuing operations                   8 845    8 668    1 164   1 085
Discontinued operation:
Glass                                     720      663      (55)     23
Group total                             9 565    9 331    1 109   1 108


                                                     Trading margin (%)
R million                                           H1 2018    H1 2017
Metals                                                 15.8       15.9
Plastics                                                5.1        3.7
Paper                                                  12.9        8.2
Corporate services                                        —          — 
Continuing operations                                  13.2       12.5
Discontinued operation:                     
Glass                                                  (7.6)       3.5
Group total                                            11.6       11.9

Continuing operations

Metals

Revenue for the Metals Division increased by 5% propelled by robust 
demand in South Africa and Nigeria. Volume growth was substantially 
higher than GDP growth rates in both countries and suggests increasing 
can pack shares and improved consumer confidence. Buoyant volume growth 
and capacity rationalisation as a result of the closure of the Bevcan 
Cape Town line are expected to significantly mitigate any risk of 
underutilised capacity in Bevcan SA. Bevcan Angola and DivFood in 
South Africa also reported good volume growth compared to the prior 
period and contributed to the strong performance of this division.

Bevcan SA is making good progress with the closure of the Cape Town can 
line which will save annual operating costs of R50 million and a further 
R5 million saving at head office level. DivFood experienced a pleasing 
recovery as the fish category performed well, on the back of an improved
fish catch and substitution with imported bulk frozen fish. The vegetable 
category continued to do well due to overall improved consumer sentiment 
which drove both revenue growth and margin improvement. As a result, 
revenue for Metals in South Africa rose by 7%. Excellent safety standards 
and efficiency gains as a result of operational excellence initiatives 
contributed to improved margins.

Despite pleasing volume growth, revenue growth at Bevcan Angola was 
moderated by the strengthening of the Rand against the US dollar. Trading 
profit in country was reduced to the extent that ends previously sold by 
the entity are now being directly supplied from South Africa, priced in 
hard currency and raw material cost pressures emanating from the 
devaluation of the kwanza. The conversion of the tin plate line to 
aluminium is being held in abeyance in anticipation of foreign currency 
allocation from the government. In addition to selling ends directly from 
South Africa, management has introduced further interventions to mitigate 
the exposure of the group in this country by limiting raw material purchases 
to the extent customers and/or the government are able to avail foreign 
currency. Should foreign currency not be made available to secure raw 
material inputs for customers, production will be constrained, which will 
attenuate the build-up of cash in Angola.

Bevcan Nigeria volumes grew significantly, driven largely by the malt 
category. The recent introduction of excise duty on alcohol beverages has 
not had a discernible impact on volume to date. Additional volumes
improved operational efficiencies and safety records have been maintained.

The diversified canning operations in the Rest of Africa were impacted by 
lower sales in Nigeria and Kenya. Kenya was challenged by backward 
integration by a major customer and a turnaround is in progress to improve 
the profitability of this operation. The feasibility of a food can line 
in Lagos, Nigeria is also being investigated to cater for anticipated 
growth in the food sector as the economy recovers.

Plastics

This division was impacted by loss of bottle volumes in South Africa and 
Europe which was mitigated by growth in closures in South Africa and 
excellent performance by Zimbabwean entities. As a result, overall revenue 
was flat. Stringent cost management in Europe, capacity filling initiatives 
in South Africa and the strong performance in Zimbabwe saw trading profit 
grow 36% to R121 million from R89 million.

Revenue for Rigid Plastics in South Africa remained steady despite the 
volume lost as a result of a lower allocation of a tender as a key customer 
consolidated its manufacturing footprint. This, coupled with lower preform 
volumes as a result of backward integration by two customers in 2017, led
to lower efficiencies and hence lower margins for liquid packaging.
Initiatives to increase capacity utilisation and strong water container 
demand throughout the country mitigated these losses especially in regions 
heavily impacted by the drought. Good growth in closures, following new 
customers gained and additional volumes from existing customers, also 
filled the gap leading to relatively flat revenue growth in South Africa.

In response to a disappointing performance, a turnaround plan has been 
approved which will result in a reduction in headcount of approximately
300 employees. Two low margin businesses have been earmarked for disposal, 
three additional plants will be consolidated into two existing facilities, 
warehousing coupled with supply chain will be optimised and an investment 
into selected new equipment will result in efficiency gains. Once fully 
implemented, profitability is expected to improve by R131 million per
annum, with once off costs of R106 million to implement the restructuring 
over an 18 month period from June 2018 and capital investment of some 
R66 million. The restructuring will result in a more sustainable and 
profitable business by FY2020.

Liquid Cartons in South Africa continues to perform well against the 
backdrop of a tough trading environment at the lower end of the beverage 
sector. Business development interventions to leverage the environmental 
advantage of cartons are underway to increase capacity utilisation.

The performance in the Rest of Africa was exceptional and demand in 
Zimbabwe was driven by increased market share from new customers and 
new products as well as the ability to manage foreign exchange exposure 
through stricter credit terms. Margins improved in excess of revenue and 
led to better margins for the region and the division overall. Nampak 
will continue working closely with customers and banks in order to 
continue the supply of packaging products in the market. Strict credit 
limits have been imposed on Nampak’s Zimbabwe operations to manage the 
risk associated with limited US dollar liquidity in that country.

In spite of Nampak Plastics Europe being impacted by lower volumes, 
management’s focus on turning this business around, managing costs and 
improving operational efficiencies has begun to yield results and the 
operating loss was reduced by 72% to R11 million compared to the prior 
period. This further contributed towards improved margins for the 
Plastics Division of 5.1% from 3.7% in the comparative period. This 
business is expected to return to profitability by the end of the 
financial year.

Paper

Revenue contracted for the period as a result of lower carton sales in 
Zambia and Malawi following a change of pack strategy by brewers in these 
countries. A pleasing recovery in carton sales in Nigeria led to improved
profitability off modestly higher sales. Tobacco case sales in Zimbabwe 
were moderately lower in light of limited availability of foreign currency, 
but contributed to improved profitability. Ongoing initiatives to service 
this region collectively continued and Malawi was restructured to function 
as a depot in order to improve profitability of this region going forward.

Discontinued operation

Glass

This division experienced good revenue growth, driven by volume growth. 
Performance has, however, been impacted by internal production inefficiencies 
and skills issues which are in the process of being addressed. Whilst energy 
supply challenges were resolved by stabilising the electricity into the 
operation at the beginning of the calendar year, operational challenges 
continued, coupled with high depreciation reflective of its capital intensity, 
this division was not profitable and made a trading loss of R55 million for the 
period. Management has decided to dispose of the Glass operation as it is 
difficult to justify further capital allocation to this division to the Board 
and shareholders, with its current performance, owing to lower than required 
returns on invested capital. Recovery plans are in place, relevant operational 
skills have been introduced and there are early signs of improvement with a 
better pack-to–melt ratio for the month of April, subsequent to the reporting 
period.

Trading performance by region is as follows:

                                           Revenue       Trading profit
R million                               H1 2018 H1 2017  H1 2018 H1 2017
South Africa                              5 208   4 953      527     458
Rest of Africa                            2 973   2 933      608     610
Europe                                      664     782      (11)    (39) 
Corporate services                            —       —       40      56
Continuing operations                     8 845   8 668    1 164   1 085
Discontinued operation:
South Africa (Glass)                        720     663      (55)     23
Group total                               9 565   9 331    1 109   1 108


Trading margin (%)
R million                                              H1 2018  H1 2017
South Africa                                              10.1      9.2
Rest of Africa                                            20.5     20.8
Europe                                                    (1.7)    (5.0) 
Corporate services                                           —        — 
Continuing operations                                     13.2     12.5
Discontinued operation:
South Africa (Glass)                                      (7.6)     3.5
Group total                                               11.6     11.9


Outlook

With improving business confidence and higher economic growth forecast 
for South Africa, demand for packaging is expected to grow at increased 
rates in 2018 and 2019. This, together with improved consumer sentiment, 
will boost beverage can market growth and management anticipates that
additional capacity by a new entrant in the beverage can market is likely 
to be absorbed in the medium term.

The closure of the Cape Town plant will remove 700 million beverage cans’ 
capacity in this market. Consequently, cost savings from a reduced 
manufacturing footprint and gains from improved operating efficiencies 
are also expected to mitigate the impact of a new entrant into the market. 
The momentum at DivFood is expected to continue for the rest of the year. 
Top line growth in Plastics is expected to remain challenging as management
will focus on turning this business around and offset the impact of reduced 
volumes by capacity filling for the rest of the year. Cost savings from the 
extensive restructuring plan to be implemented over the next 12 – 18 months 
should result in improved profitability going forward.

The group’s operations in the Rest of Africa are anticipated to continue 
generating cash as demand in Angola, the recovering economy in Nigeria and 
limited competition in Zimbabwe will drive demand for packaging products. 
Overall performance will, however, be impacted by macroeconomic dynamics. 
Unless the kwanza is further devalued and/or initiatives to repatriate 
foreign reserves are progressed in Angola, foreign currency shortages are 
expected to continue for the rest of 2018. While the improving oil price 
will assist in increasing foreign exchange reserves, management will continue 
to only operate to the extent customers and the government are able to supply 
foreign currency required for raw material inputs. If liquidity in Zimbabwe 
does not improve in the second half, performance will be subdued as more 
stringent requirements for customers have been put in place to limit exposure 
in that country. The restructuring in the other entities in the Rest of Africa 
will continue to service this region optimally.

The European business will keep its focus on securing additional volume from 
second-tier dairies and optimise its structure. This business is expected to 
return to profitability during the 2018 financial year, one year earlier than 
previously guided.

Dividend

Despite significantly improved gearing and improved cash extraction from 
Nigeria, no dividend was declared for the period as a consequence of significant 
cash balances currently held in restricted areas.

On behalf of the board

TT Mboweni       AM de Ruyter                GR Fullerton
Chairman         Chief executive officer     Chief financial officer

Bryanston
30 May 2018

Condensed group statement of comprehensive income

                                                Restated          Restated
                                    Unaudited  Unaudited           Audited
                                     6 months   6 months              Year
                                        ended      ended             ended
                                       31 Mar     31 Mar  Change    30 Sep
 R million                    Notes      2018       2017       %      2017
Continuing operations                                              
Revenue                               8 845.3    8 668.2       2  17 401.8
Operating profit                  3   1 043.5    1 109.1      (6)  1 430.2
Finance costs                          (270.3)    (243.6)           (508.8) 
Finance income                          181.5      128.8             287.4
Share of net profit/(loss)                                         
from associates and joint                                          
ventures                                  2.3       (2.3)              0.1
Profit before tax                       957.0      992.0      (4)  1 208.9
Income tax expense                      (86.0)     (96.2)           (304.0) 
Profit for the period from                                         
continuing operations                   871.0      895.8      (3)    904.9
Discontinued operation                                             
Loss for the period from                                           
discontinued operation           4     (107.1)     (42.6)           (548.9) 
Profit for the period                   763.9      853.2     (10)    356.0
Other comprehensive                                                
(expense)/income, net of tax                                       
Items that may be reclassified                                     
subsequently to profit or loss                                     
Exchange differences on                                            
translation of foreign                 (664.5)    (138.8)            (122.1)
operations                                                         
Gain/(loss) on cash flow                                           
hedges                                   88.0       (0.7)             (14.1) 
Items that will not be                                             
reclassified to profit or                                          
loss                                                               
Net actuarial gain from                                            
retirement benefit                                                 
obligations                                 —          —               19.5
Other comprehensive expense                                        
for the period, net of tax              (576.5)    (139.5) (>100)    (116.7) 
Total comprehensive income                                         
for the period                           187.4      713.7    (74)     239.3
Profit attributable to:                                            
Owners of Nampak Ltd                     725.7      773.4     (6)     234.8
Non-controlling interests in                                       
subsidiaries                             38.2       79.8              121.2
                                        763.9      853.2     (10)     356.0
Total comprehensive income/                                        
(expense) attributable to:                                         
Owners of Nampak Ltd                    205.6      641.6     (68)     120.3
Non-controlling interests in                                       
subsidiaries                            (18.2)      72.1              119.0
                                        187.4      713.7     (74)     239.3
Continuing operations                                              
Earnings per share (cents)              129.4      127.4       2      122.3
Diluted earnings per share                                         
(cents)                                 129.0      127.1       2      121.9
Continuing and discontinued                                        
operations                                                         
Earnings per share (cents)              112.8      120.8      (7)      36.6
Fully diluted earnings per                                         
share (cents)                           112.4      120.4      (7)      36.5
                                                                   

Condensed group statement of financial position

                                                     Restated
                                      Unaudited     Unaudited      Audited
R million                     Notes 31 Mar 2018   31 Mar 2017  30 Sep 2017
Assets
Non-current assets
Property, plant and 
equipment and investment
property                                7 650.6      10 471.3     10 151.4
Goodwill and other
intangible assets                       3 143.5       3 979.3      3 568.8
Joint ventures, associates
and other investments                      22.8          25.3         21.8
Deferred tax assets                        25.6          57.3         49.3
Liquid bonds and other loan       6     1 832.0         752.8      1 164.0
receivables*
Current assets
                                       12 674.5      15 286.0     14 955.3
Inventories                             3 010.3       3 572.9      3 980.3
Trade receivables and other
current assets?*                        2 626.8       3 010.8      3 009.9
Tax assets                                 19.9         194.6         17.3
Liquid bonds and other loan
receivables — current*            6       882.8         424.8        882.1
Bank balances and deposits*             1 844.2       2 369.5      2 385.0
                                        8 384.0       9 572.6     10 274.6
Assets classified as held
for sale                          4     2 589.4             —            — 
Total assets                           23 647.9      24 858.6     25 229.9
Equity and liabilities
Capital and reserves
Share capital                              35.5          35.4         35.5
Capital reserves                          (65.3)       (112.3)      (116.4) 
Other reserves                           (604.5)        (98.0)       (84.4) 
Retained earnings                      10 215.1      10 011.9      9 476.9
Shareholders’ equity                    9 580.8       9 837.0      9 311.6
Non-controlling interest                  351.3         322.6        369.5
Total equity                            9 932.1      10 159.6      9 681.1
Non-current liabilities
Loans and other borrowings              3 225.1       6 080.2      6 007.2
Retirement benefit
obligation                              1 465.2       1 602.5      1 558.0
Deferred tax liabilities                  283.1         423.1        294.5
Other non-current
liabilities                                57.3          53.4         64.8
                                        5 030.7       8 159.2      7 924.5
Current liabilities
Trade payables, provisions 
and other current
liabilities                             3 334.2       3 797.3      4 766.0
Tax liabilities                            33.9          55.6         82.6
Loans and other borrowings —
current                                 2 138.4         338.3        221.9
Bank overdrafts                         3 027.2       2 348.6      2 553.8
                                        8 533.7       6 539.8      7 624.3
Liabilities directly 
associated with assets
classified as held for sale       4       151.4             —            — 
Total equity and liabilities           23 647.9      24 858.6     25 229.9


* During September in the prior year, the US dollar indexed kwanza bonds 
  (described as “liquid bonds”) were reclassified from cash equivalents to 
  loan receivables after a reassessment of their nature in terms of IAS7: 
  Statement of Cash flows. As a result of this reclassification, these 
  bonds (amounting to R687.3 million being non-current and R419.5 million 
  being current) were removed from “bank balances and deposits” (previously 
  described as “bank balances, deposits and cash equivalents”) where they 
  had been presented in March 2017 and presented together with other non-
  current loan receivables (previously described as “non-current assets”) 
  as “liquid bonds and other loan receivables”. In addition, the current 
  portion of loan receivables, which was previously presented as part of 
  “trade receivables and other current assets” has now been separately 
  presented as “liquid bonds and other loan receivables — current”.

Condensed group statement of changes in equity
 
                                     Unaudited    Unaudited     Audited
                                      6 months     6 months        Year 
                                         ended        ended       ended
                                        31 Mar       31 Mar      30 Sep
R million                                 2018         2017        2017
Opening balance                        9 681.1      9 444.5     9 444.5
Net shares issued during the
period                                     5.6         11.7        11.8
Share-based payment expense                9.1          9.1         5.0
Share grants exercised                    (5.7)       (11.7)      (11.7) 
Treasury shares disposed                  54.6            —           — 
Acquisition of business                      —         (7.7)       (7.7) 
Total comprehensive income for
the period                               187.4        713.7       239.3
Dividends paid                               —            —        (0.1) 
Closing balance                        9 932.1     10 159.6     9 681.1
Comprising:
Share capital                             35.5         35.4        35.5
Capital reserves                         (65.3)      (112.3)     (116.4) 
Share premium                            268.0        262.4       262.4
Treasury shares                         (515.8)      (557.9)     (557.9) 
Share-based payments reserve             182.5        183.2       179.1
Other reserves                          (604.5)       (98.0)      (84.4) 
Foreign currency translation
reserve                                  766.9      1 363.8     1 375.0
Financial instruments hedging
reserve                                   92.7         18.1         4.7
Recognised actuarial losses           (1 447.1)    (1 466.6)   (1 447.1) 
Share of non-distributable
reserves in associates and joint
ventures                                     —          3.7           — 
Other                                    (17.0)       (17.0)      (17.0) 
Retained earnings                     10 215.1     10 011.9     9 476.9
Shareholders' equity                   9 580.8      9 837.0     9 311.6
Non-controlling interest                 351.3        322.6       369.5
Total equity                           9 932.1     10 159.6     9 681.1

Condensed group statement of cash flows


                                         Unaudited  Unaudited   Audited
                                          6 months   6 months      Year 
                                             ended      ended     ended
                                            31 Mar     31 Mar    30 Sep
R million                          Notes      2018       2017      2017
Cash generated from operations
before working capital changes       7.1   1 435.4    1 435.5   2 276.0
Working capital changes              7.1    (859.7)    (911.5)   (326.8) 
Cash generated from operations       7.1     575.7      524.0   1 949.2
Net interest paid                           (221.8)    (198.2)   (405.8) 
Income tax paid                              (78.2)     (75.1)   (152.7) 
Cash flows from operations                   275.7      250.7   1 390.7
Dividends paid                                   —          —      (0.1) 
Net cash generated from
operating activities                         275.7      250.7   1 390.6
Capital expenditure                         (206.0)    (469.7)   (735.3) 
Replacement1                                (139.3)    (227.8)   (377.0) 
Expansion                                    (66.7)    (241.9)   (358.3) 
Net proceeds on the disposal of
business                                         —       56.5      57.8
Post-retirement medical aid buy-
out                                              —     (562.3)   (569.2) 
Increase in liquid bonds for
hedging purposes2                           (994.4)    (489.3) (1 336.5)
Other investing activities                    14.6       20.3      12.0
Net cash utilised before
financing activities                        (910.1)  (1 193.8) (1 180.6) 
Net cash raised from/(repaid in)
financing activities                         118.4       11.7    (238.4) 
Net decrease in cash and cash
equivalents                          7.2    (791.7)  (1 182.1) (1 419.0) 
Net (overdraft)/cash and cash
equivalents at beginning of
period                                      (168.8)   1 224.5   1 224.5
Translation of cash in foreign
subsidiaries                                (222.5)     (21.5)     25.7
Net (overdraft)/cash and cash
equivalents at end of period         7.3  (1 183.0)      20.9    (168.8)

1 Following the JSE’s proactive monitoring process, the replacement 
  capital expenditure cash flow has been reclassified from “cash flow 
  from operations” to “cash flows from investing activities” and the 
  comparatives restated. The result of this classification is an increase 
  in cash generated from operating activities of R227.8 million and a 
  decrease in cash utilised in investing activities of R227.8 million for 
  the six months ended 31 March 2017.

2 As indicated on the condensed group statement of financial position, 
  US dollar indexed Angolan kwanza bonds were reclassified from cash 
  equivalents to loan receivables after a reassessment of their nature 
  in terms of IAS7: Statement of Cash flows. As a result of this 
  reclassification, the movement in these assets is now presented as 
  investing activities. The March 2017 comparative has been restated.

Notes

1. Basis of preparation

The condensed interim financial statements are prepared in accordance 
with the requirements of the JSE Limited Listings Requirements for 
interim reports, and the requirements of the Companies Act of South 
Africa applicable to condensed financial statements. The Listings 
Requirements require interim reports to be prepared in accordance with 
and contain the information required by IAS 34 Interim Financial 
Reporting, as well as the SAICA Financial Reporting Guides as issued 
by the Accounting Practices Committee and the Financial Pronouncements 
as issued by the Financial Reporting Standards Council.

The interim financial statements have been prepared under the supervision 
of the chief financial officer, GR Fullerton CA(SA).

2. Accounting policies

The accounting policies adopted and methods of computation used are 
consistent with those applied for the group’s 2017 annual financial 
statements.

New and revised International Financial Reporting Standards in issue 
and effective for the current financial year

The group adopted all amendments or improvements to standards or 
interpretations that became effective during the current financial 
year with no effect on the financial statements of the group. No new 
standards were effective for the current financial year and the group 
did not elect to adopt any of these standards earlier than their 
effective dates.

New and revised International Financial Reporting Standards in issue 
but not yet effective for the current financial year

At the date of authorisation of these financial statements, the following 
standards, amendments to existing standards and interpretations were in 
issue but not yet effective for the current year and have not been early 
adopted.

These standards, amendments and interpretations will be effective for 
annual periods beginning after the dates listed below:

IFRS 9: Financial Instruments

The standard is effective for years commencing on or after 1 January 2018. 
The standard will be adopted by the group for the financial reporting 
period commencing 1 October 2018.

IFRS 9 provides guidance on the classification, measurement and 
recognition of financial assets and financial liabilities and replaces 
IAS 39. The standard establishes three measurement categories for financial 
assets: amortised cost, fair value through other comprehensive income and fair
value through profit and loss. Classification of financial assets into these 
categories is dependent on the entity’s business model and the characteristics 
of the contractual cash flows of the specific financial asset. There were no 
significant changes to the classification guidance for financial liabilities.

IFRS 9 introduces a new expected credit loss impairment model that replaces 
the incurred loss impairment model used in IAS 39.

The group will have to design impairment models incorporating new principles 
such as twelve months expected credit loss, life time expected credit loss, 
forward-looking information and time value of money in order to comply with 
expected credit loss impairments under IFRS 9. The group has performed a 
preliminary assessment, the results thereof indicate no material adjustment 
is required.

The group is still to make a decision on the transition method applied. 

IFRS 15: Revenue From Contracts With Customers
The standard is effective for years commencing on or after 1 January 2018.
The standard will be adopted by the group for the financial reporting period 
commencing 1 October 2018.

IFRS 15 requires an entity to recognise revenue in such a manner as to depict 
the transfer of the goods or services to customers, at an amount representing 
the consideration to which the entity expects to be entitled in exchange for 
those goods or services. The standard has a 5-step process to be applied to 
all contracts with customers. The standard provides guidance for identifying 
the contract with the customer, identification of the deliverables 
(performance obligations), determination of the transaction price (including 
the treatment of variability in the transaction price and significant financing 
components), how to allocate the transaction price and when to recognise revenue.

The group has assessed its significant contracts with customers in line with 
the new standard and notes that the treatment of contracts with variable pricing 
will be altered under IFRS 15, however no material impacts are otherwise expected 
with respect to revenue measurement and timing.

The group is still to make a decision on the transition method to be applied.

IFRS 16: Leases

The standard is effective for years commencing on or after 1 January 2019. The 
standard will be adopted by the group for the financial reporting period commencing 
1 October 2019.

IFRS 16 requires a lessee to recognise a right of use asset and lease obligations 
for all leases except for short term leases, or leases of low value assets which 
may be treated similarly to operating leases under the current standard IAS 17 
if the exceptions are applied. A lessee measures its lease obligation at the present 
value of future lease payments, and recognises a right of use asset initially 
measured at the same amount as the lease obligation including costs directly related 
to entering into the lease. Right of use assets are subsequently treated in a 
similar way to other assets such as property, plant and equipment or intangible 
assets dependent on the nature of the underlying item.

The group has assessed a majority of its significant lease agreements, in particular 
those relating to property rentals, and the preliminary assessment indicates that 
material adjustments to non-current assets, non- current liabilities and EBIDTA 
are to be expected as a result of the new standard. The current estimate of the 
impact of adopting IFRS 16 on the March 2018 reported numbers is as follows:

* increase in net assets: R429 million
* increase in EBITDA: R101 million
* decrease in profit for the period: R17 million

Management continues to assess the implications of the remaining individually 
insignificant lease agreements in which the group is the lessee which may cause the 
final impact to differ from the estimates provided above.

The group is still to make a decision on the transition method to be applied or the 
application of exceptions related to short term and low value asset leases.

Restatement of comparatives

The comparatives to the condensed statement of comprehensive income (March 2017 and 
September 2017), have been restated for the impact of the Nampak Glass Division 
being recognised as a discontinued operation during the current period. Refer 
note 4.

The main impact of these restatements is as follows:

                                                   Unaudited      Audited
                                                    6 months         Year
                                                       ended        ended
R million                                        31 Mar 2017  30 Sep 2017
Revenue — decrease                                    (663.1)    (1 419.9) 
Operating profit — (decrease)/increase                 (23.2)       469.2
Finance income — increase                               82.7        169.7
Profit before tax — increase                            59.5        638.9
Income tax expense — increase                          (16.9)       (90.0) 
Profit for the period from continuing
operations — increase                                   42.6        548.9
Loss for the period from discontinued
operation — increase                                   (42.6)      (548.9) 
Profit for the period                                      —            — 
Earnings per share — continuing operations
Earnings per share (cents) — increase                    6.6         85.7
Fully diluted earnings per share (cents) —
increase                                                 6.7         85.4

The March 2017 comparatives to the condensed statement of financial
position and statement of cashflows, have also been restated for the 
impact of the reclassification of the US dollar indexed kwanza bonds from
cash equivalents to loan receivables, while the March 2017 comparatives to 
the statement of cashflows has also been restated for the impact of the 
Johannesburg Stock Exchange (“JSE”) proactive monitoring process through 
which replacement capital expenditure has been reclassified to investing 
activities. The impact of these changes is set out in detail on the 
statement of financial position and the statement of cash flows 
respectively.

3. Included in operating profit for continuing operations are:

                                                    Restated    Restated
                                       Unaudited   Unaudited     Audited
                                        6 months    6 months        Year
                                           ended       ended       ended  
R million                            31 Mar 2018 31 Mar 2017 30 Sep 2017
Depreciation                               284.1       314.7       587.8
Amortisation                                10.8         8.3        18.4
Net translation loss recognised on         245.0        17.6       273.6
financial instruments
Net loss arising from Angolan and
Nigerian exchange rate movements            96.5         4.5       160.0
Net loss arising from normal
operating activities                       148.5        13.1       113.6
Reconciliation of operating profit 
to trading profit
Operating profit                         1 043.5     1 109.1     1 430.2
Net abnormal losses/(gains)*               120.7       (24.0)      491.3
Retrenchment and restructuring
costs                                        8.3        20.2        73.1
Net impairment losses on plant, 
equipment, intangible assets,
investments and shareholder loans           26.6        10.2       232.5
Onerous contract and related
losses                                         —           —        81.8
Net profit on disposal of
businesses and investments                     —       (30.1)      (25.4) 
Gain on acquisition of business                —       (27.0)      (27.0) 
Net profit on disposal of other
property                                   (11.3)       (1.8)       (3.0) 
Net loss arising from Angolan and
Nigerian exchange rate movements            96.5         4.5       160.0
Other                                        0.6           —        (0.7) 
Trading profit                           1 164.2     1 085.1     1 921.5

* Abnormal losses/(gains) are defined as losses/(gains) which do not arise 
  from normal trading activities or are of such a size, nature or incidence 
  that their disclosure is relevant to explain the performance for the period.

4. Discontinued operation

On 16 February 2018, the Nampak Ltd board (“board”) took a decision to 
dispose of the Nampak Glass Division (“Nampak Glass”). The group met the 
criteria of IFRS 5: Non-current Assets Held for Sale and Discontinued 
Operations as at 31 March 2018 and therefore classified the asset as held 
for sale and as a discontinued operation as at that date. The asset consists 
of three furnaces, nine associated production lines, net working capital and 
the property at which the operation is located. To ensure the long term 
profitability of Nampak Glass and to address the operational skills gap, 
the board resolved to approach packaging industry players to invite proposals 
for the sale of this business. Exploratory discussions have been held with 
a number of strategic players with a formal corporate finance disposal process 
currently in progress. It is expected that this disposal will be concluded by 
no later than the first half of the 2019 financial year. Nampak Glass is the 
only operation in the Glass operating segment.

                                                    Restated     Restated
                                    Unaudited      Unaudited      Audited
                                     6 months       6 months         Year 
                                        ended          ended        ended
R million                         31 Mar 2018    31 Mar 2017  30 Sep 2017
Results of the discontinued
operation
Revenue                                 720.2          663.1      1 419.9
Operating expenses other than 
depreciation, amortisation
and impairment expenses                (651.0)        (527.9)    (1 235.6) 
EBITDA*                                  69.2          135.2        184.3
Depreciation and amortisation          (124.8)        (112.0)      (218.2)
Impairment of plant, goodwill
and intangible assets                    (7.0)             —       (435.3) 
Net finance costs                       (86.1)         (82.7)      (169.7) 
Loss before tax                        (148.7)         (59.5)      (638.9) 
Attributable income tax
benefit                                  41.6           16.9         90.0
Loss for the period from
discontinued operations                (107.1)         (42.6)      (548.9) 
Cashflows of the discontinued
operation
Net cashflows from operating
activities                               70.7           (9.8)        98.1
Net cashflows from investing
activities                              (44.4)         (85.1)      (177.6) 
Net cashflows                            26.3          (94.9)       (79.5) 
The major classes of assets
and liabilities of the
discontinued operation at the 
end of the period are as follows:
Property, plant and equipment         1 749.1              —            — 
Intangible assets                         4.9              —            — 
Inventories                             587.2              —            — 
Trade receivables and other
current assets                          248.2              —            — 
Assets classified as held for
sale                                  2 589.4              —            — 
Trade payables and other
current liabilities                     151.4              —            — 
Liabilities directly
associated with assets
classified as held for sale             151.4              —            — 
Net operating assets                  2 438.0              —            —

* EBITDA is calculated before net impairments.

5. Determination of headline earnings and headline earnings per share

                                                    Restated    Restated
                                    Unaudited      Unaudited     Audited
                                     6 months       6 months        Year 
                                        ended          ended       ended
R million                         31 Mar 2018    31 Mar 2017 30 Sep 2017
Continuing operations
Profit attributable to equity
holders of the company for              832.8          816.0       783.7
the period
Less: preference dividend                   —              —        (0.1) 
Basic earnings                          832.8          816.0       783.6
Adjusted for:
Net impairment losses on plant, 
equipment, intangible
assets and investments                   26.6           10.2       232.5
Net profit on disposal of
businesses and investments                  —          (30.1)      (25.4) 
Gain on acquisition of
business                                    —          (27.0)      (27.0) 
Net profit on disposal of
other property, plant, equipment 
and intangible
assets                                   (9.9)          (2.5)       (9.1) 
Tax effects and non-
controlling interests                    (0.6)           0.2       (17.4) 
Headline earnings for the
period                                  848.9          766.8       937.2
Headline earnings per
ordinary share (cents)                  132.0          119.7       146.3
Diluted headline earnings per
share (cents)                           131.5          119.4       145.8

                                                    Restated    Restated
                                    Unaudited      Unaudited     Audited
                                     6 months       6 months        Year 
                                        ended          ended       ended
R million                         31 Mar 2018    31 Mar 2017 30 Sep 2017
Continuing and discontinued 
operations
Profit attributable to equity 
holders of the company for
the period                              725.7          773.4       234.8
Less: preference dividend                   —              —        (0.1) 
Basic earnings                          725.7          773.4       234.7
Adjusted for:
Net impairment losses on plant, 
equipment, intangible
assets and investments                   33.6           10.2       667.8
Net profit on disposal of
businesses and investments                  —          (30.1)      (25.4) 
Gain on acquisition of
business                                    —          (27.0)      (27.0) 
Net profit on disposal of
other property, plant, equipment 
and intangible
assets                                   (9.9)          (2.5)       (7.4) 
Tax effects and non-
controlling interests                    (2.6)           0.2       (49.9)
Headline earnings for the
period                                  746.8          724.2       792.8
Headline earnings per
ordinary share (cents)                  116.1          113.1       123.8
Fully diluted headline
earnings per share (cents)              115.7          112.8       123.4

6. Liquid bonds and other loan receivables

                                                    Restated    Restated
                                    Unaudited      Unaudited     Audited
                                     6 months       6 months        Year 
                                        ended          ended       ended
R million                         31 Mar 2018    31 Mar 2017 30 Sep 2017
Liquid bonds1                         2 621.9        1 106.8     1 954.0
Equipment sales receivables2             54.4           49.4        68.7
Other loan receivables                   38.5           21.4        23.4
Total liquid bonds and other loan
receivables                           2 714.8        1 177.6     2 046.1
Less: Amounts receivable within
one year reflected as current           882.8          424.8       882.1
Liquid bonds                            871.3          419.5       867.0
Equipment sales receivables               6.9              —        10.7
Other loan receivables                    4.6            5.3         4.4
Non-current liquid bonds and other
loan receivables                      1 832.0          752.8     1 164.0

1 Liquid bonds relate to US dollar indexed Angolan kwanza bonds. As at 
  31 March 2018 the Angolan kwanza equivalent of USD221.2 million 
  (March 2017: USD82.5 million; September 2017: USD144.1 million) had 
  been hedged through these bonds in order to protect the group against 
  further Angolan kwanza devaluation. Interest rates earned are between 
  5.0% to 7.8%.
2 Equipment sales receivables are repayable from 2018 to 2025. Interest 
  rates earned are between 5.8% to 14.0%.

7. Condensed group statement of cash flows analysis

7.1 Reconciliation of profit before tax to cash generated from operations
    (continuing and discontinued operations)

                                                    Restated   Restated
                                        Unaudited  Unaudited    Audited
                                         6 months   6 months       Year 
                                            ended      ended      ended
                                           31 Mar     31 Mar     30 Sep
R million                                    2018       2017       2017
Profit before tax                           808.3      932.5      570.0
Continuing operations                       957.0      992.0    1 208.9
Discontinued operation                     (148.7)     (59.5)    (638.9) 
Adjustment for:
Depreciation and amortisation               419.7      435.0      831.4
Net profit on disposal of businesses,        (9.9)     (32.6)     (32.8)
property, plant, equipment and 
intangible assets
Financial instruments fair value
adjustment                                   39.7      (37.8)     (62.7) 
Net defined benefit plan expense             33.6        6.5       50.5
Impairment losses                            35.6       10.2      672.6
Reversal of impairment losses                (2.0)         —       (4.8) 
Share of (profit)/loss in associates
and joint ventures                           (2.3)       2.3       (0.1) 
Share based payment expense                  12.6       12.6        6.9
Net finance costs                           174.9      197.5      391.1
Gain on acquisition of business                 —      (27.0)     (27.0) 
Retirement benefits, contributions and
settlements                                 (74.8)     (63.7)    (119.1) 
Cash generated from operations before
working capital changes                   1 435.4    1 435.5    2 276.0
Decrease/(increase) in inventories          206.6     (222.6)    (621.4) 
(Increase)/decrease in trade
receivables and other current assets        (78.4)      93.7      167.7 
(Decrease)/increase in trade payables
and other current liabilities              (987.9)    (782.6)     126.9
Cash generated from operations              575.7      524.0    1 949.2

7.2 Movement in cash and cash equivalents

                                                    Restated   Restated
                                        Unaudited  Unaudited    Audited
                                         6 months   6 months       Year 
                                            ended      ended      ended
                                           31 Mar     31 Mar     30 Sep
R million                                    2018       2017       2017
Net decrease in cash and cash 
equivalents per statement of cash
flows                                      (791.7)  (1 182.1)  (1 419.0) 
Add back non-operational items:
Increase in liquid bonds for
hedging purposes                            994.4      489.3    1 336.5
Post-retirement medical aid buy-
out                                             —      562.3      569.2
Net increase/(decrease) in cash
and cash equivalents adjusted               202.7     (130.5)     486.7

7.3 Net (overdraft)/cash and cash equivalents
                                                    Restated   Restated
                                        Unaudited  Unaudited    Audited
                                         6 months   6 months       Year 
                                            ended      ended      ended
                                           31 Mar     31 Mar     30 Sep
R million                                    2018       2017       2017
Bank balances and deposits                1 844.2    2 369.5    2 385.0
Bank overdrafts                          (3 027.2)  (2 348.6)  (2 553.8) 
Total                                    (1 183.0)      20.9     (168.8)

8. Carrying amount of financial instruments

The carrying amounts of financial instruments as presented on the statement 
of financial position are measured as follows:

                                       Unaudited    Unaudited     Audited
                                        6 months     6 months        Year 
                                           ended        ended       ended
                                          31 Mar       31 Mar      30 Sep
R million                                   2018         2017        2017
At fair value — level 2
Financial assets
Derivative financial assets1                84.8         14.1        19.1
Financial liabilities
Derivative financial liabilities1           19.3         22.6        22.6
At amortised cost
Financial assets                         7 168.7      6 369.8     7 266.6
Non-current liquid bonds and other
loan receivables                         1 832.0        752.8     1 164.0
Trade receivables and other current
assets2                                  2 609.7      2 822.7     2 835.5
Current liquid bonds and other loan
receivables                                882.8        424.8       882.1
Bank balances and deposits               1 844.2      2 369.5     2 385.0
Financial liabilities                   11 654.8     12 368.7    13 166.7
Non-current loans and other
borrowings                               3 225.1      6 080.2     6 007.2
Trade payables and other current
liabilities3                             3 264.1      3 601.6     4 383.8
Current loans and other borrowings       2 138.4        338.3       221.9
Bank overdrafts                          3 027.2      2 348.6     2 553.8


1 Derivative financial assets and liabilities consist of forward exchange 
  contracts and commodity futures. Their fair values are determined using 
  the contract exchange rate at their measurement date, with the resulting 
  value discounted back to the present value.
2 Excludes derivative financial assets (disclosed separately) and 
  prepayments. Includes trade receivables presented as part of assets 
  classified as held for sale.
3 Excludes derivative financial liabilities (disclosed separately) and 
  provisions. Includes trade payables presented as part of liabilities 
  directly associated with assets classified as held for sale.

9. Capital expenditure, commitments and contingent liabilities

                                       Unaudited    Unaudited     Audited
                                        6 months     6 months        Year 
                                           ended        ended       ended     
                                          31 Mar       31 Mar      30 Sep
R million                                   2018         2017        2017
Capital expenditure                        206.0        469.7       735.3
Expansion                                   66.7        241.9       358.3
Replacement                                139.3        227.8       377.0
Capital commitments                        318.9        250.2       589.9
Contracted                                  83.2        171.3       256.4
Approved not contracted                    235.7         78.9       333.5
Lease commitments (including sale
and leaseback transaction)               3 212.4      3 545.1     3 585.5
Land and buildings                       3 179.9      3 515.4     3 542.6
Other                                       32.5         29.7        42.9
Contingent liabilities — customer
claims and guarantees                        5.0          6.0         6.8


10. Share statistics
 
                                        Unaudited    Unaudited     Audited
                                         6 months     6 months        Year 
                                            ended        ended       ended     
                                           31 Mar       31 Mar      30 Sep
R million                                    2018         2017        2017
Ordinary shares in issue (000)            689 767      689 404     689 404
Ordinary shares in issue — net of
treasury shares (000)                     644 671      640 620     640 620
Weighted average number of ordinary 
shares on which basic earnings and 
headline earnings per share are
based (000)                               643 367      640 496     640 496
Weighted average number of ordinary 
shares on which diluted basic earnings 
and diluted headline
earnings per share are based (000)        645 501      642 164     642 630

11. Key ratios and exchange rates

11.1 Key ratios

                                                        Restated  Restated
                                            Unaudited  Unaudited   Audited
                                             6 months   6 months      Year 
                                                ended      ended     ended     
                                               31 Mar     31 Mar    30 Sep
R million                                        2018       2017      2017
EBITDA1 — continuing operations  R million    1 365.0    1 442.3   2 268.9
Net gearing (including liquid                                    
bonds)                                   %         39         51        45
Current ratio                        times        1.3        1.5       1.3
Current ratio (including non-                                    
current portion of liquid                                        
bonds2)                              times        1.5        1.6       1.5
Acid test ratio                      times        0.9        0.9       0.8
Acid test ratio (including non-                                  
current portion of liquid                                        
bonds2?)                             times        1.1        1.0       1.0
Net debt: EBITDA — debt                                          
covenants                            times        2.3        2.1       2.3
Net debt: EBITDA — debt              times        1.4        1.7       1.6
covenants (including liquid bonds)                               
EBITDA: Interest cover (debt                                     
covenants)                           times        7.6        7.8       7.2
Return on equity — continuing                                    
operations                               %       17.2       16.7       8.5
Return on net assets —                                           
continuing operations                    %       17.1       14.0      14.4
Net worth per ordinary share3        cents      1 486      1 536     1 454
Tangible net worth per ordinary                                  
share3                               cents        999        914       896
                                                                
1 EBITDA is calculated before net impairments.
2 Calculated as the non-current portion of liquid bonds that can be converted 
  back into cash within three months.
3 Calculated on ordinary shares in issue, net of treasury shares.

11.2 Exchange rates

Key currency conversion rates used for the periods concerned were as 
follows:

                                                   Restated    Restated
                                   Unaudited      Unaudited     Audited
                                    6 months       6 months        Year 
                                       ended          ended       ended
                                 31 Mar 2018    31 Mar 2017 30 Sep 2017
Rand/UK pound
Average                                17.35          16.83       16.96
Closing                                16.62          16.83       18.17
Rand/Euro
Average                                15.36          14.54       14.78
Closing                                14.57          14.29       15.98
Rand/US dollar
Average                                12.78          13.57       13.38
Closing                                11.86          13.41       13.56
Naira/US dollar
Average                               359.75         311.69      321.90
Closing                               360.00         314.29      358.99
Kwanza/US dollar
Average                               189.76         171.73      171.74
Closing                               218.64         171.73      171.75


12. Related party transactions

Group companies, in the ordinary course of business, entered into various 
purchase and sale transactions with associates, joint ventures and other 
related parties. The effect of these transactions is included in the 
financial performance and results of the group.

13. Events after the reporting date

As part of the group’s ongoing review of its portfolio, a restructuring 
of the South African Plastics Division is being considered. The full
financial effects and timing of this restructure are not yet known and
will be determined in due course.

Date: 30/05/2018 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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