ZAMBIA – Zambian Breweries Plc has recorded a profit before tax of K102 million (US$6.3m( in the first half of this year, compared to K67.5 million (US$4.4m) posted in the same period last year, representing a 51 percent growth.
The company has attributed the growth to a strong top-line performance, as well as excellent cost control of both operational and financial costs.
According to the interim results for the six-month period ended June 30, 2022, the listed company recorded double digit growth in revenue driven by consumer demand of its brands, as well as progressive easing off of COVID-19 restrictions that partially impacted prior year results.
Total Revenue grew by 22% to K1.63 billion (US$100m) from 1.33 billion (US$82.2m) registered in the prior corresponding period, owing to volume growth driven by high margin core and premium global brands.
“The general economic environment has also presented relatively stable factors notably so the exchange rate against major trading currencies which has not only softened, but also remained impressively predictable allowing for better cost forecasting and control,” highlighted the company.
As part of the wider AB-Inbev Africa group, Zambian Breweries has stated it will continue to actively pursue ambitious growth opportunities as demonstrated by the already announced major expansion plan for the Lusaka Brewery Plant.
The maker of Mosi Lager is seeking to invest US$80 million over the next 18 months, to double production capacity at its Lusaka plant.
Scheduled to be completed by the end of 2023, it is expected to create more direct and indirect jobs, expand the company’s agriculture out-grower schemes, offer further procurement opportunities for local suppliers and service providers, and contribute additional tax revenue to government.
The new investment is an addition to the company’s long-standing contribution to the Zambian economy over many years, with just under US$400 million spent on capital investment programmes in the last decade.
The capital expenditure has included the construction of a malting plant in the Lusaka South Multi-Facility Economic Zone (MFEZ) which was commissioned four years ago; upgrading of its Lusaka and Ndola plants with cutting-edge technology; and the replacement of bottles, kegs, and crates to increase brewing capacity and address beer shortages across the country.
In addition, a recent independent study by global consulting firm EY revealed that in 2019 alone, Zambian Breweries contributed K1.6 billion to government revenues.
In the same period, the maker of Mosi Lager generated K5.8 billion in output and K1 billion in GDP, creating 80,096 direct and indirect, jobs equivalent to K164 million worth of labour income.
During the ten-year period, Zambian Breweries has more than doubled its procurement, of cassava, from 4,000 metric tonnes in 2019/2020 to almost 5,000 metric tonnes in 2020/2021, which directly benefited over 6,000 households over the past 5 years in its project areas.
The brewery also managed to procure 2,300 metric tonnes of sorghum – positively impacting over 3,500 households.
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