Company news in brief

Sappi expects a full-year profitPaper and packaging group Sappi expects to post a year-end profit as demand for its products continues to improve and cost-cutting bear fruit.The group last week reported that it booked a US$29 million (R537 million) profit in its second quarter to end-March, though this was down 58% year-on-year. It still made a half-year loss of US$97 million, from a profit of US$259 million previously.After a record year in 2022, customers whittled away stocks built up in fear of shortages during Covid-19. Along with unpredictable paper markets and pressure on consumers, sales volumes for many of its major products came under severe pressure in 2023, with Sappi responding by curtailing production to manage the weak demand. The group closed two mills in Europe during the past six months, cutting about US$100 million (R1.85 billion) in costs, with further cuts to corporate overhead costs in Europe expected to save another US$20 million, CEO Steve Binnie said. Net cash utilised for the quarter of US$234 million was principally due to a cash outflow of US$133 million for the closure and restructuring of the Stockstadt and Lanaken Mills, a dividend payment of US$84 million and a seasonal working capital investment of $45 million. Sappi ended the period with net debt US$150 million higher at US$1.4 billion, mainly due to the cash utilisation."From a balance sheet perspective, we had to pay for the closure," said Binnie. "We will generate more cash in the second half of the year and the next quarter. With the current result, we beat our expectations from three months ago." - Fin24Nampak postpones results after cyberbreachAfrica&#039;s largest packaging group, Nampak, has been forced to shift the publication of its interim results out by a month to late June after a cyberbreach in March saw an unknown third-party gain access to its IT systems.The JSE-listed group said it now expected to release results on 28 June, noting that, historically, it released its half-year results in the last week of May every year.Although its systems are up and running again, Nampak said it was carrying out further steps to ensure that all financial information is complete and accurate, given that the incident took place shortly before the close of the interim period."Accordingly, the company has elected to delay the publication of its interim results to accommodate these steps. Nampak has taken a prudent approach in ensuring the integrity of its financial reporting obligations to shareholders."While the breach on 20 March did not affect the company’s operations or manufacturing, the JSE-listed company flagged the incident to the market on 26 March that it had been forced to switch over to its backup manual compensating controls.Opportune Investments MD Chris Logan said it was unfortunate that this cyberbreach had occurred while Nampak was in the midst of a "tricky turnaround", but added the group was doing what it could to manage the situation.While a postponement of company results because of a cyber incident is unusual in the normal course of business, Logan said these types of breaches were becoming increasingly common around the world.Consequently, cybersecurity firms are doing very well globally. - Fin24Upbeat SAB sees record volumesSouth African Breweries (SAB), the local unit of global brewing giant AB InBev, says initiatives such as locally producing its Corona brand at its Roslyn operation and consistent investment behind its key brands are paying off.Not only is the group seeing significant margin improvement, but it is gaining market share in both the beer and beyond beer categories.Speaking to News24 after the release of first-quarter results on Wednesday, SAB CEO Richard Rivett-Carnac said the company had delivered "very pleasing" results in a tough economy, keeping the momentum it achieved in the last three months of 2023.AB InBev, which is the world&#039;s largest brewer, said on Wednesday that high volumes at SAB had helped deliver above 10% revenue and profit growth in its first quarter.At the same time, it also indicated that SAB, according to its estimates, was taking market share from rivals.Volumes grew by mid-single digits, or about 5%, continuing to outperform the industry in both beer and beyond beer.Without disclosing the amount, Rivett-Carnac said the company had invested a lot of money to localise the production of Corona at its Roslyn facility in 2021, instead of importing the product from Mexico, which helped its margins "significantly".It has also consistently invested in sales and marketing to boost its brands, which also include Stella Artois, Flying Fish and Brutal Fruit, among others. - Fin24More profit for MTN UgandaMTN Uganda, Africa&#039;s largest mobile operators fourth biggest market by revenue, reported a 24.4% rise in profit after tax to 150 billion Ugandan shillings (R736 million) for its quarter to end March. The operator has benefitted from the fact its debt is local and not subject to the vagaries of foreign exchange movements, while its mobile subscribers picked up 12% to 19.9 million. Data revenue was up more than a fifth, and its core profit margin climbed slightly. It has maintained medium-term guidance of delivering mid-teen service revenue growth, stable core profit margins above 50% and maintaining capex (ex-leases) intensity at mid-teen levels as it supports its growth prospects. - Fin24RFG expects HEPS growthRhodes owner RFG said it expects headline earnings in its six months to end-March to be between 18% and 23% higher than the R216.8 million reported previously. Revenue growth in the regional segment for the period was mainly driven by price inflation in an environment of lower sales volumes in certain product categories due to the weak consumer environment. International revenue declined due to softer global pricing, lower opening stock levels, and operational challenges at the Cape Town port, partially offset by foreign exchange gains. Despite the pressure on sales volumes, the group has improved its operating profit margin relative to the prior period by driving profitable growth, recovering inflationary increases in raw material and packaging costs and cost savings from operational efficiencies.RFG has rocketed more than 70% in the past year. - Fin24

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