20 March 2017

Namibia: Nam Breweries Revenue, Profits Up

THE Namibia Breweries Limited maintained its strong market position despite a strained local economy, challenges in export markets and declining consumer spending, the company has said.

During the announcement of financial results for the half year ended 31 December 2016 in Windhoek on Friday, the company's managing director, Wessie van der Westhuizen, said Namibian, South African and export volumes increased by 1,1%, 33,1% and 7,3% respectively.

"Revenue increased by 13,6% and operating profit was 6,5% higher than the comparative period. The solid increases are attributed to a positive volume mix and focus on production," he said.

Headline earnings per share is up by 3,2%, while earnings per share is down by 45% as a result of an increased equity loss from an associate.

He added that the increase in the share of losses from NBL's associate is mainly attributable to an increased shareholding, as well as final adjustments as a result of the restructuring of the South African operations.

"The NBL board declared an interim dividend of 42 cents on 2 March 2017, which represents an increase of 5% from the previous period," Van der Westhuizen said.

NBL finance director Graeme Mouton said the company maintained an operating margin of 22% despite the challenging trading environment.

"Overall NBL has delivered good performance in the last six months, mainly driven by the growth in South African production volumes.," he said.

Total beer volumes sold to export markets increased by 7,7% compared with the previous period. The focus export markets, Tanzania and Zambia, continued to show good growth. Export volumes to Botswana and Mozambique declined in comparison with the prior period, he added.

Commenting on the results, PSG Wealth Management said in a brief report that growth in revenue (13,6%) and operating profit (5,9%) exceeded their expectations.

They, however, said that due to larger associate losses, the dividend per share growth at 5% was in line with expectations on 6,5%.

"Large losses were experienced in associate investments of N$138 million. Earnings before interest and taxes to net revenue margins are higher than expected at 26,7%. There has also been a recovery in export sales to Tanzania and Zambia which were struggling before, now growing at 7,7%," the report highlighted.

PSG further said that investors will be upbeat about the revenue and earnings growth beating expectations. The company further said the large losses in associate investments mostly relate to increased shareholding and the impact of accounting entries because of restructuring in the South African operations.

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