Zambian Breweries half year profits surge 40% on increased sales

ZAMBIA – Zambian Breweries Plc, a subsidiary of AB InBev, has reported 40 percent growth in profits after tax to K193 million (US$14.72m) in the half-year period ending June 2019, driven by increased sales.

The Castle Lite and Carling Black beer brands maker said that the growth was significantly boosted by increased sales in the clear beer category. The brewer posted a net profit of K137.7m (US$10.5m) in the same corresponding of 2018.

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Sales of clear beers increased by 5.1 per cent over the two corresponding periods under review, an update by NewsDiggers reveals.

“Clear beer volumes grew 5.1 per cent supported by strong growth in Carling Black Label and Castle Lite brands, which grew 131 per cent and 13 per cent, respectively,” Zambian Breweries said in a statement.

“Profit before tax grew by 12 per cent, despite the Coca-Cola business divesture due to the company’s continued cost control measures and once off costs in the 2018 base.

“Further growth resulted from the savings realised on borrowing costs following the full liquidation of interest-bearing debt and almost nil utilization of overdraft facilities,” the brewer added.

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Zambian Breweries says that despite Zambia’s ongoing economic challenges, rapid growth of the middle-class remains an opportunity, particularly in their premium brands segment.

The brewer added that it remained optimistic about the future despite Zambia’s challenging macroeconomic outlook.

“Despite these challenges, the rapid growth of Zambia’s middle-class remains an opportunity, particularly in the premium brands segment.

“Our strong and diversified portfolio of brands remains the consumer’s first choice. Our brand portfolio and our unrivalled distribution strategy will enable us to deliver our growth targets.

“The company will continue investing ahead of the curve and upgrading its clear beer capacity to enhance growth.

“This is part of the company’s 3-year plan capital expenditure strategy in line with the AB-Inbev group Africa growth strategy,” stated Zambian Breweries.

In the past two years, the brewer has recorded significant growth buoyed by a successful execution of its growth strategy, expanding distribution and increased focus on the growing middle-class segment with locally produced and imported premium beer brands.

Zambian Breweries closed the 2018 financial year with a profit after tax of K1.45 billion (US$110.56m) from just K220 million (US$16.77m) in 2017. The company highlighted record-breaking beer volumes as the major driver.

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