Breweries profit up 182% - Namibia
Economist.com.na - Sep 12th 2014, 10:04
Releasing its financial results in the capital this week, Namibia Breweries Limited announced a 10% decrease in operating profit but a staggering rise of 182% in net profit after tax mainly due to the outstanding success of their cost-cutting measures.
The national brewer’s operating profit came to N$451 million.
NBL said its turnover showed a meagre dip of 3% to N$2.3 billion, and a slight decrease in headline earnings per share of 11% to 159.1 cents. Operating profit after tax rose quite significantly and was up 182% on the previous year totalling N$205 million as compared to the previous year’s N$72.9 million while earnings per share rose by the same percentage.
Hendrik van der Westhuizen, Managing Director of the Breweries said, “Namibia Breweries Limited delivered a sound financial performance despite challenges in portfolio mix, foreign exchange fluctuations, not taking a price increase in 2014, volume migration to South Africa, and ahead-of-the-curve advertising and promotion investment. Despite this reality, we remain confident in Namibia Breweries Limited’s ability to build a business with outstanding performance.”
During the financial year, Namibia Breweries Limited launched its premium Windhoek Lager brand in China coupled with a re-entry into Mauritius as well as the launch of its Vigo malt beverage in South Africa, Botswana, and Zambia. Another highlight for the brewer was the launch of the 330ml Vigo slender can, enabling an extension of the beverage into more market segments. The Tafel Lager brand delivered double-digit growth and continued to lead the mainstream segment in Namibia while the Windhoek Draught brand performed satisfactorily.
In the Namibian market, NBLimited achieved a slight growth in market share of 3% bringing its total market penetration to 87%. Van der Westhuizen said distribution in Mozambique and Tanzania also have seen good growth. The export business margins remained small due to initial investment in target markets and are being aggressively pushed to establish profitable volumes in the key focus markets van der Westhuizen stated.
Greame Mouton, NBL Financial Director said, “Namibia Breweries Limited continued its strong performance in the local market however delivered softer results. Namibia beer volumes experienced double-digit growth while the soft drinks and ready-to-drink category experienced double-digit growth compared to the previous year.
The Diageo Heineken NBL joint venture experienced a decline in its overall volume from the previous year, however taken together with royalties and production margins; South Africa continues to make positive returns from ongoing operations.” However, NBL incurred a loss on its loan of N$60 million to the joint venture company. The loan is anticipated to be converted into additional share capital in DHN Drinks to offset the losses. Underscoring NBL’s confidence in their DHN equity are further investments to the tune of N$104 million.
NBL will continue with its planned investment aimed at improving its returnable bottle float, and further investments in green energy resources, van der Westhuizen said adding that their new solar plant on the roof of the breweries in Windhoek has saved them 1.05 million kilowatt hours so far.
“We expect our recent performance to continue in Namibia with continued solid growth in beer despite the expected increase in the local competitor environment. In line with our longer-term vision, we also expect our involvement to continue in South Africa and the export markets, which will lead to further growth in these markets.
We are confident that the business will continue to benefit from the investments made and that the passion and commitment of our people to take this business to a new level will ensure Namibia Breweries Limited maintains its trajectory towards growth and prosperity, van der Westhuizen concluded.From Economist.com.na
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