NAMIBIA – Namibia Breweries Limited, a leading beverage manufacturing company in Namibia has reported a 14.6% decline in full year revenue for the period ended 30 June 2020 to N$2.6 billion (US$174.6m) from previous year’s N$3 billion (US$201.47m).
According to the company, the drop is attributed to several months of lockdowns and alcohol prohibition in both its main markets i.e. Namibia and South Africa which registered a decline in volume sales.
NBL’s overall volumes declined by 16.6% with the manufacturer of alcoholic, non-alcoholic and soft beverages, noting that Pre-COVID its sales were delivering fair growth across all its markets as during the interim period it achieved positive growth of 3%.
“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,” said NBL Managing Director (MD), Marco Wenk.
In Namibia, its parent market volumes declined by 14.6%, in South Africa it went under by 22.9%, however, its export markets showed a growth of 10.4%.
With the overall drop in volumes, the subsidiary of Ohlthaver & List (O&L) Group earned N$264 million (US$17.7m) in net profit, a 71.7% decrease, which was also propelled by equity loss from Heineken SA, its joint venture with Dutch brewing company, Heineken B.V.
“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 (MD) – Marco Wenk
Heineken SA experienced severe trade restrictions in South Africa, contributing to the NBL share of associate loss of N$76.7 million (US$5.15m).
This is a significant swing from last year’s share of profit of N$450 million (US$30m) which included a substantial prior year deferred tax asset, derived from previously unutilised tax losses, of N$ 334.7 million (US$22.5m).
The brewery’s 2020 operating profit for the period under review is N$453 million (US$30.4m), 30.5% down from previous year’s N$651 million (US$43.7m).
It’s Earnings per share is 126.5 cents, down by 71.9% but within its previous projection as the company expected it to decrease by between 65% and 75% compared to last year.
Outlook
The company expects volumes in its 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.
“Our 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,” Wenk noted.
Marking 100 years, NBL continues to be resilient, despite difficult conditions. The business has gone through many phases and are confident that they are well positioned to weather the current period of uncertainty and positively reinvent the business.
“We remain committed to the highest quality, purposeful leadership, committed employees, strong relationships, breakthrough thinking and innovative brands,” Wenk concluded.
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