JSE Securities Exchange South Africa and Namibian Stock Exchange listed brewer Namibian Breweries (NBS) on Wednesday reported a decline in headline earnings per share to 11,1 Namibian cents for the 12 months ended January 31 from 29,5 Namibian cents for the same period a year ago.
A final dividend of 11 Namibian cents – up from a previous 8,37 cents – was declared.
Group revenue increased by 29,8% to N$878,9-million from N$677,2-million due largely to a 7,5% increase in overall across product categories and markets and price adjustments due to inflationary pressures.
Operating profit increased 7,1% from N$65,8% million to N$70,5-million, but operating profit margins remained under pressure, declining from 9,7% to 8%.
The company said the main factors contributing to this were increasing input and production overhead costs due to weakening currency lag; the cost of new packaging not recovered through pricing; higher depreciation charges; the incorporation of third party distributors; fierce competitor activity and aggressive pricing strategies; and overall negative pressure on the regional and global macro-economic climate.
During the period there was strong growth in agencies brands, particularly Fruittree, and the incorporation of third party distributors in the Western Cape and Kwazulu-Natal areas of South Africa.
A 1% decline in volume growth in alcoholic beverages in Namibia was offset by 5% growth in South Africa and a 99,1% growth in export markets — mainly in Angola.
Non-Alcoholic Beverages showed 0,4% growth in Namibia, 12% growth in South Africa and 6% growth in export markets. Overall growth was 7,5%.
The company said that the marketing and sales strategy alignment initiatives had delivered early results across key markets.
A market refocus in Namibia resulted in the volume declines of Nambrew’s core beer brands of the past few years being halted, with the volume loss due to the culling of non-performing brands being compensated for by the increased value delivery of core brands.
The packaging upgrade of the 340ml non-returnable beer packs was exceptionally well managed and launched within a six month period from conception. This resulted in new growth trends being achieved across all markets, the company said.
Looking ahead, the company said the directors believe sales volumes will continue to reflect steady growth. Exports to Angola are slowing down and initiatives are being taken to maintain and increase presence in that market. A further area of focus is to improve the operating profit margins and the group has embarked on initiatives to improve efficiency and overall cost reduction in the areas of production, supply chain and non-core activities to further augment operating profit margins.
The new business partnership with Dutch brewer Heineken International and Diageo Plc is an exciting prospect for the company as it will further strengthen Nambrew’s presence and market share in the premium market segment in Southern Africa, it said. – I-Net Bridge