By Hilary Mare
THE Namibia Breweries Limited (NBL) – subsidiary of the Ohlthaver & List Group declared a final dividend of 40c for the period ended June 30 2016, which represents an increase of eight percent from the previous year.
This comes after NBL delivered results for 2016, showing growing operating profit and Namibian beer volumes by 6.7 percent and eight percent respectively. Earnings per share went up by 43.8 percent and headline earnings per share slightly down by 0.7 percent. Essentially operating profit went up 6.7 percent and the solid increase is attributed to a positive volume mix, constant focus on First Time Right production, efficiencies in operating costs and strong gross margins resulting from favourable price variances. NBL finance director, Graeme Mouton said: “NBL delivered a solid operating margin of 22 percent despite very strong foreign exchange fluctuations. The Namibian beer market continues to grow and strengthen our leading competitive position, resulting in an increase of eight percent from the previous year. We continuously increase our support to local procurement partners to further develop the Namibian economy and mitigate foreign exchange exposure. In light of that, we have achieved a local spend figure of 38 percent during the current year.”
However, turnover went down by 0.3 percent and was mainly impacted by volume migration to South Africa. As a result of this, volumes shipped to South Africa were down 43 percent over the comparative period, in order to efficiently utilise capacity and maximise the return on investment.
Namibia beer volumes continued to grow and increased by eight percent compared to the previous period, driven predominantly by Tafel Lager sales. The current year saw the launch of two new beer brands, King Lager and Amstel Lite. King Lager is the first commercial beer brewed from local barley. In addition to a new brand for NBL, the barley project is expected to create an additional 2 500 Namibian job opportunities over a 10-year period – a major contributor to the Group’s vision of creating 4 000 additional job opportunities by 2019. NBL further launched two new soft drink variants, as an addition to its non-alcoholic portfolio, being McKane Lemonade and Vigo Marula Lite. Windhoek Draught and Windhoek Lager continued to grow by amongst others, hosting the Boyz II Men concert and supporting various other campaigns. NBL has also strengthened its strategy to position itself in the craft beer market and started trading in the mainstream water category with the brand Aquasplash.
NBL MD, Wessie van der Westhuizen: “NBL’s solid performance was the direct result of employees taking ownership and bringing our purpose ‘Creating a Future, Enhancing Life’ to life. We brought a sense of urgency, speed of execution, innovation and breakthrough intent into all our conversations. These results were achieved despite continued macro-economic challenges, volume migration to South Africa and exchange rate impacts. We wish to thank all NBL shareholders, internal and external stakeholders, as well as our loyal customers and consumers for their continuous support and trust in NBL.” On December 1 2015, NBL acquired 25 percent of the issued share capital of Sedibeng Brewing and an additional 9.5 percent of the issued share capital of DHN Drinks, which is now called Heineken South Africa. With effect from December 31 2015, Heineken South Africa acquired the assets and operations of Sedibeng Brewery.
Van der Westhuizen concluded: “Despite the challenging environment we operate in, we are optimistic about our future business outlook. We are committed to drive our innovation agenda to deliver products that meet the changing needs of our consumers. The Namibian market is fairly saturated but increasingly dynamic due to changing consumer trends. We will maximise on our strong distribution network, which will serve us as we diversify into other beverage categories and continue to leverage and maximise on the synergies expected from our new partnership with Heineken”.
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