NBL registers 10% interim revenue growth driven by high sales volumes in South Africa

NAMIBIA – Namibia’s leading beer maker, Namibia Breweries Limited (NBL), has managed a rebounded revenue of 10.6% to N$1.5 billion (US$100m) for the six months ended 31 December 2021. 

This is after the company suffered a revenue drop of 18.5% to N$1.385 billion (US$93m) in the same period in 2020 due to Covid-19 related restrictions, coupled with alcohol bans in Namibia and South Africa.

Announcing the results last week, NBL’s Managing Director (MD) Marco Wenk said the top line performance was triggered by overall volume increase by 9.2%, predominantly due to 99.9% growth in NBL production volumes sent to South Africa.

Revenue growth was also due to royalty income growth from Heineken SA which increased by 27.3% to N$71 million (US$4.7m), whereas the equity loss from associate turned positive, delivering N$31 million (US$2.08m) equity income for the period.

The significant increase in South African volumes affected the mix of products sold, and thus resulted in a lower overall gross margin percentage.

Namibian beer volumes declined by 7.3% due to Covid-19 waves, which created a restricted trading environment during the period of July/August 2021, while significant swings in volume demand were experienced towards the end of 2021.  

The potential negative revenue impact from lower Namibian volumes was lessened through price increases which became effective from October 2021.

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“Festive season volumes were muted, with consumer trends still showing healthy demand for higher alcoholic beverages while the mainstream segment saw intense price competition, in addition to pervasive economic pressures.

“South African beer volumes returned to pre-Covid levels, with lively demand for Windhoek and Heineken in the premium segment,” he observed.

NBL’s response to changing consumer preferences has been strategic since the start of the pandemic.

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Its continued drive for new innovations saw it launch a Draught-on-Tap unit for at-home consumption in November 2021.

The company also launched the EduDrink online training programme aimed at addressing the harmful use of alcohol while reaffirming its commitment to the national road safety campaign over the festive season.

NBL further supported the Namibian Police Force with breathalyzer consumables and water donations at roadblocks.

The brewer’s operating expenses increased by 12.8% as the anticipated increase in global raw material costs materialised.

“In addition, we experienced challenges to our packaging material supply as well as a change in production mix compared to the prior period,” said Wenk.

Cost-savings and other initiatives however contributed to sustainable profitability as operating profit increased by 4% to N$358 million (US$24.04m).

The group’s board did not declare an interim dividend for the period under review, in accordance with conditions of the potential Heineken SA disposal transaction and acquisition of Distell Namibia.

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