Nampak Zimbabwe Limited has cautioned that operational risks including power supply disruptions, intensifying competition and supply chain delays could weigh on performance, despite reporting strong volume and revenue growth in the first quarter ended December 31, 2025.

In a trading update for the period, the packaging group said revenue rose 19% compared to the prior year, driven mainly by increased demand from the tobacco sector and higher PET/Preform volumes. 

Overall group volumes surged 39%, supported by the carryover of late-season tobacco case orders.

However, management warned that the operating environment remains fragile, with several challenges threatening the sustainability of growth.

“While monetary policy has contributed to a more stable operating environment, liquidity constraints continue to affect business operations,” the company said, noting that tight financial conditions have limited access to working capital across the economy.

One of the most pressing challenges highlighted was persistent power supply disruptions, particularly at the Ruwa operations. The company said electricity shortages resulted in plant breakdowns and increased costs as operations relied more heavily on diesel-powered generators.

“Ongoing power challenges have negatively affected plant reliability and escalated operating costs,” management said, adding that the situation had a direct impact on production efficiency, especially in the metals division.

The Plastics and Metals segment delivered mixed results. Mega Pak recorded a 10% increase in volumes, benefiting from festive-season demand for PET/Preforms. In contrast, CarnaudMetalbox saw volumes decline 15%, weighed down by equipment breakdowns and raw material supply delays.

“Supply chain disruptions in the metals division constrained production and sales during the quarter,” the company noted.

In the Paper and Packaging division, corrugated volumes at Hunyani rose sharply by 73%, underpinned by strong tobacco-related demand. However, commercial carton volumes declined 11%, reflecting changing customer behaviour.

Management attributed the decline to customer in-sourcing, with some clients opting to manufacture their own packaging.

“The commercial packaging market is becoming increasingly competitive, with customers exploring self-manufacturing options,” the company said, warning that this trend could continue to pressure volumes.

The group also flagged intensifying competition in the corrugated packaging segment as a growing risk, particularly as new players enter the market and existing competitors expand capacity.

Nampak Zimbabwe said it remains cautiously optimistic but stressed that its strategy will prioritise efficiency and cost discipline.

“Our focus remains on improving operational efficiencies, managing costs and making prudent capital expenditure decisions that enhance capacity and long-term profitability,” management said.

While the recovery in agriculture and record gold production have provided some macroeconomic support, the company acknowledged that operational resilience will be key in navigating ongoing structural challenges in the Zimbabwean economy.

Nampak Zimbabwe’s shares were trading at 78.00 ZWG cents as at 25 February 2026, reflecting a 10.34% decline on the day, amid broader market volatility and investor caution around operating risks.