LISTED Namibia Breweries Limited (NBL) had a rough first six months in the 2021 financial year after the company’s profits dropped by over N$147 million (46%) – but there is an upside.
The company’s beer will soon be sold in the United States (US).
Unaudited interim financial statements for the six months ended in December 2020, which were released last week, showed that an agreement was concluded between the company and a distributor in Texas, in the US, to stock up and sell Namibian beer.
The 100-year-old company has made its mark in the challenging global beer market, with Europe and other African countries stocking up on litres of beer.
The most recent country to import Namibian beer is Australia, where the NBL says its footprint is gaining momentum.
The released statements show that profit for the six months of the financial year stood at N$170 million – far from the N$317 million recorded in 2019.
Revenue took a dip of about 18%, settling at N$1,3 billion, which the company attributed to Covid-19-related trade restrictions and alcohol bans.
Many countries banned the sale of alcohol, and South Africa, one of the big export markets for NBL products, experienced several alcohol bans.
According to the statements, the volume of alcohol exported to the neighbouring country dipped by over 66%. Overall, sales volumes declined with 23%.
Namibian beer volumes, on the other hand, increased by 1,5%, which the company attributed to strong consumer support.
While both revenue and profit after tax recorded double figures, operating profit, which measures the profit a company generates from its core business function, took a slight skip up at N$344 million – 1,3% above the N$339 million recorded in 2019.
Beer contributed the most to the company’s revenue in Namibia at 77% in the six months ending in December last year.
Ciders contributed only 0,4% to sales, compared to 1,1% in 2019.
The sale of soft drinks dipped slightly from a sales contribution of 4,9% in 2019 to 4,6%.
The company still has a strong balance sheet at N$3,1 billion, with a N$482 million cash and cash equivalents balance.
Investment in associates, mainly the Heineken South Africa investment, was in bad shape for the six months under review, reporting a loss, and bringing the investment value to N$689 million from almost N$1 billion in 2019.
The loss led to NBL’s share of an associated loss of N$90 million – a complete reversal from 2019’s positive contribution of N$77 million.
Although still making a profit, revenue decreased amid ongoing uncertainty as a result of Covid-19, yet the company still declared a dividend of 56c – an increase from the 53c declared and paid for 2019’s interim financial statements.
The company says it expects steady growth for its core portfolio in the second half of the financial year, anchored by branded beers Windhoek and Tafel, while noting that South African performance will heavily depend on trade restrictions on the alcohol industry.
The group had a brand portfolio of over 15 products last year, including the popular Tafel Lager, Mckane, AquaSplash, Fruitree, Camelthorn and Windhoek Draught.
A snippet of the company’s financial statements has been published on its website for further review.
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