NBL registers 71.7% decline in full-year profits attributed to drop in Heineken SA sales

NAMIBIA – Namibia Breweries Limited’s (NBL), a subsidiary of the Ohlthaver & List (O&L) Group has reported that its revenue for the year ended June 2020 dipped by 14.6% to N$2.6 billion (US$152.7m), down from last year’s N$3 billion (US$176.2m).

The company registered an overall decline in volumes sold by 16.6% given the unusually challenging year as a result of COVID-19.

“While NBL has seen significant growth over the past years, current economic conditions demand that we need to adjust our ways of working to be able to defend market share and continue growing volumes in future.”

NBL Managing Director – Marco Wenk

Before the virus outbreak, NBL says that its sales volumes were growing for the Namibia, South Africa and the export market.

According to the brewery, it was delivering fair growth in sales volumes in Namibia, South Africa and the export markets compared to the prior period.

The ban on the sale of alcohol during the months of April and May 2020 contributed to a volume decline of 14.6% for Namibia and 22.9% for South Africa.

However, exports to other markets in Africa and beyond recorded a positive growth of 10.4%.

“Although lost volumes due to the COVID-19 alcohol bans could not be recovered by the end of the financial year, the business was well prepared to capitalise on any volume opportunities both during lockdown but also post the alcohol ban stages,” indicated the company.

The decline in sales was matched against direct and selling expenses of N$2.1billion (US$123.3m), leading to an operating profit of N$453 million (US$26.6m), a 30.5% drop from the previous year’s N$651 million (US$38.2m).

NBL’s net profit for the year decreased by 71.7% to N$264 million (US$15.5m), the company attributing the decline mainly to lower volumes as well as the equity loss of N$76 million (US$4.4m) from Heineken SA which experienced severe trade restrictions in South Africa.

NBL Managing Director (MD), Marco Wenk said, “While NBL has seen significant growth over the past years, current economic conditions demand that we need to adjust our ways of working to be able to defend market share and continue growing volumes in future.

“Fortunately, NBL has a strong offering through brands such as Tafel Lager, Windhoek Lager, Windhoek Draught and King Lager to enable us to defend market share in all segments. We are exceptionally proud for having remained a sustainable business over the last 100 years.”

The company expects that its volumes in core markets to remain under pressure in the short-to-medium term given the economic, business and consumer impact of COVID-19 lockdowns and restrictions.

Its focus will continue being on stabilising the business while placing high emphasis on maximizing volumes, delivering at the lowest cost and ensuring the best price at the highest quality.

In addition, stock availability, production efficiency and brand innovation will remain key to recover to normal volumes while protecting margins.

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“Marking 100 years, NBL continues to be resilient, despite difficult conditions. We remain committed to the highest quality, purposeful leadership, committed employees, strong relationships, breakthrough thinking and innovative brands,” Waldemar concluded.

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