Zambian Breweries’ Plc profits increase six-fold as volumes surge

ZAMBIA – Zambian Breweries Plc has posted record breaking profits after tax of US$121.36 million during its 2018 financial year from just US$18.41 million in 2017 driven by increased beer volumes.

In a statement announcing its audited financial results for the year ended December 31, 2018 said that the remarkable performance was mainly attributed to increase in beer volumes, which grew by 23% during the period under review.

“Results for the year 2018 were remarkable, especially on the clear beer side, with volumes growing at a record of 23%.

Our total volumes grew by 13%, partially eroded by a decline of 8% in the soft drinks category, leading to a total growth of 11%,” the company stated.

The company said that the performance was also supported by the successful execution of its growth strategy which majorly entailed expanding distributions through a ‘go deep and go rural’ plan.

The Mosi and Castle Lager also linked the performance to affordability in addition to strategic market segment focus especially in the middle-class segment both in its locally produced and imported premium beer brands.

“Locally-manufactured beer sales volumes were up 29% above prior year, driven by strong growth of the 750ml mainstream and affordable packs.

The mainstream 750ml pack recorded impressive 166% growth, while the affordable 750ml pack recorded 77% growth,” the brewer explained.

The company further stated that the launch of popular brands, such as the globally-renowned Budweiser and Stella Artois had also gained traction.

“The premium segment is back to growth with an 8 per cent improvement against prior year, thanks to the recovery of Castle Lite and the introduction of Stella Artois and Budweiser.

Strong gains were recorded by Stella Artois in the high-end segment, and there were encouraging results from Budweiser,” it stated.

“We are braced for a demanding year in 2019, amid economic uncertainty, increased regulation and a continued threat from smuggling and illicit alcohol,” the company added.

In October, 2016, AB InBev, the Belgium-based brewer, took over ownership of SABMiller in a US $100 million deal, which assumed new ownership of Zambian and National Breweries.

Ab InBev, which manufacturers the globally-renowned Stella Artois and Budweiser beer brands, among others, closed a more than US $100 million acquisition of its fiercest rival and world’s second brewer, SABMiller.

This meant AB InBev has since 2016 been in the process of drastically increasing its market share in regions around the world, particularly Africa, where SABMiller had a visible presence through its country-level subsidiaries.

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