NBL performance solid

Namibia Breweries Limited (NBL) last week announced its financial results, reporting revenue growth of 11.7% to N$2.7 billion, an increase in operating profit of 13% or N$611 million and a profit after tax of N$318 million, which showed a decrease of 14.5% to end its financial year.

Reflecting on the results, NBL MD Wessie van der Westhuizen said it was indicative of the brewer's resilience to change.

“Our performance demonstrates NBL's resilience and ability to adapt to changes within our operating environment. Beer volumes continued to grow and NBL still enjoys a majority market share in Namibia. We have seen exceptional growth of the Tafel Lager brand in South Africa,” Van der Westhuizen said.

According to him, NBL was positioning itself to maximise opportunities available in the craft beer market which included the reintroduction of Camelthorn as well as work done on the Stellenbrau and Soweto Gold brands.

“During the year, we worked with Stellenbrau and Soweto Gold on product pack renovations and format extensions that are more aligned to customer needs. Our own craft beer brand Camelthorn was renovated and relaunched in Namibia and South Africa in July 2017,” he said.

Van der Westhuizen was further of the opinion that the quality of NBL's relationship with Heineken South Africa contributed to this year's performance.

“While Namibian beer volumes shrunk by 3%, this decline was offset by a 46% increase in volumes sold to Heineken South Africa. NBL therefore achieved an overall growth volume of 8%,” he said.

NBL maintained an operating margin of 22% despite the challenging trading environment, according to its financial director, Graeme Mouton.

“Profit attributable to shareholders of N$318 million was delivered, a decrease of 14.5% year-on-year. This decrease is mainly attributable to the increase in equity accounted in losses from NBL's associate, Heineken South Africa, as a result of the increased shareholding,” Mouton said.

Further to that, the equity losses were further increased with the loss incurred by Heineken South Africa resulting from the restructuring of the South African operations, Mouton noted.

Van der Westhuizen said Heineken South Africa's success was welcome.

“We are excited by the significant success of Heineken South Africa in the past year. We will continue to maximise scale efficiencies and capabilities across the two businesses in order to maximise our supply footprint in Southern Africa, as well as synergies in the export market,” he said.

IJG analyst Dylan van Wyk felt that the South African operations could have performed better.

“Once again, news from South Africa was slightly disappointing. Equity losses from the associate were larger than we forecasted, as losses from ongoing operations amounted to N$159.7 million,” he said.

PSG analyst Eloise Du Plessis felt NBL delivered solid financial results, with operating profits and revenue growing by 13% and 12% respectively, above forecasts.

“Growth in sales to South Africa of 46% were significant, while Namibian beer sales volumes shrunk by 3% under the strained economic climate.

“Net earnings decreased 14.5% during the financial year mainly due to a larger equity accounted loss from the associate, Heineken South Africa which was lower than the PSG estimate. This equity loss was mainly due to increased shareholding and the restructuring of the South African operations,” she said.

OGONE TLHAGE