NBL financial results for the year ended 31 December 2020

PERFORMANCE HIGHLIGHTS

  • Revenue N$1.39 billion, down by 18.5%
  • Operating profit N$344 million, up by 1.3% •
  • Profit after tax N$171 million, down by 46%
  • Earnings per share 82.7 cents, down by 46.3%
  • Final dividend per ordinary share 56 cents, up by 5.7%

Business Performance

Namibia Breweries Limited’s (NBL) – a subsidiary of the Ohlthaver & List (O&L) Group – overall volumes declined by 23.1% predominantly due to COVID- 19 related restrictions as well as alcohol bans in South Africa (SA), which adversely impacted the SA trading environment. Namibian beer volumes increased by 1.5% on the back of strong consumer support and loyalty, with specifically Windhoek Draught showing exceptional growth. Beer volumes supplied to South Africa were down by 66.1% due to lockdown conditions and alcohol bans. Export volumes contracted by 15% with Tanzania and Zambia still performing well, also given a favourable exchange rate during the reporting period.

Heineken SA experienced severe trade restrictions during the reporting period, which impacted volumes as well as royalties and resulted in a revenue decrease for NBL of 18.5% to N$1 386 million.

NBL’s share of associate loss of N$90 million is a significant reversal from last year’s positive contribution of N$77 million. The NBL Board declared an interim dividend of 56c on 09 March 2021, which represents an increase of 5.7% from the previous period.

NBL Managing Director (MD), Marco Wenk: “The first six months of NBL’s 2021 financial year has seen a 1.5% increase in Namibian beer volume and 1.3% growth in operating profit. This is mainly attributed to our continued drive for responsible and excellent trade execution, high quality standards, flexible and innovative route to market, cost and production efficiencies as well as innovative operational execution. Our Windhoek Draught brand has shown exceptional growth within our mainstream beer category. Unfortunately COVID-19 related alcohol bans and trade restrictions in South Africa (SA), adversely impacted NBL’s overall volume and profitability performance mainly due to significantly lower volumes sent to South Africa as well as royalty income from sales in SA. Although COVID-19 did impact our export markets, favourable exchange rates allowed us to absorb this impact.

Furthermore, we are exceptionally proud of having reached our 100-year Centenary during October 2020. Given our strong and diverse brand portfolio, strong route to market, as well as world class execution, NBL is well positioned to defend and grow its market share while capitalising on any future growth opportunities.

Brands

Horizon, with three variants (Lemon, Apple and Berries), was launched as a new offering in the non-alcoholic segment.

Awards

Windhoek Lager, Windhoek Draught and Tafel Lager received gold medals at the 2021 international Deutsche Landwirtschafts Gesellschaft (DLG) Quality Evaluation. Windhoek Non-Alcoholic and Windhoek Lite received silver medals.

Financial Performance

NBL Finance Director, Waldemar von Lieres: “Performance in Namibia for the first 6 months of the 2021 financial year was very encouraging despite COVID-19 restrictions. Beer volumes in Namibia delivered positive growth, overall margins were encouraging due to good price and cost management. Heineken South Africa experienced severe trade restrictions during the reporting period, which impacted volumes as well as royalties and resulted in a revenue decrease for NBL of 18.5% to N$1 386 million (2020: N$1 700 million). NBL’s share of associate loss of N$90 million is a significant reversal from last year’s positive contribution of N$77 million.”

Outlook

Wenk concluded: “We expect steady performance for our core portfolio in the second half of the financial year, anchored by our Windhoek and Tafel branded beers. NBL will continue to focus on further innovation around brands, trade execution and operational efficiencies while we continue to support and adhere to all regulations and directives to reduce the spread of the COVID-19 virus. Once trade restrictions have been reasonably lifted, we expect our South African performance to stabilize and return to normality.

Although trading conditions will continue to impact our business in the second half of our financial year, NBL continues to be resilient and we remain committed to finding every growth opportunity possible while appreciating our role as an industry leader towards responsible and safe behaviour.

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