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NBL expects a decrease in pro?t after tax

08/09/2017
by KELVIN CHIRINGA
Business

Namibia Breweries Limited (NBL) expects a decrease in its pro?t after tax and earnings per share for the period ended 30 June 2017, the group’s trading statement reveals.

“The Group´s pro?t after tax and earnings per share for the period ended 30 June 2017 is expected to decrease materially by between 10% and 20% compared to the previous year,” said the group.

NBL ascribes the decrease to a deep in equity losses from Heineken in South Africa. This is a contrast to NBL’s previous annual ?nancial results which indicated pro?t after tax having increased by 43.8 percent, mainly due to deferred tax write-back in 2016.

“As mentioned in the Trading Statement issued in March 2017, the above decreases are primarily attributable to the increase in equity losses from the Group´s associate, Heineken South Africa, resulting from an increased shareholding in that entity,” said NBL. Earnings per share and pro?t after tax last year were both up by 43.8 percent and headline earnings per share slightly down by 0.7 percent.

The NBL Board further declared a ?nal dividend of 40c on September 6, 2016, which represented an increase of 8 percent from the previous year. The group says the equity losses this time around have since further increased with losses incurred by Heineken South Africa resulting from the restructuring of the South Africa operations.

However, NBL notes that the current performance of Heineken South Africa is on track and in line with the original business case.

On the other hand, operating pro?t is projected to perform solidly by a 10 to 20 percent increase compared to the 2016 ?nancial year. “NBL shareholders are advised that the Group´s Operating pro?t is expected to increase materially by between 10% and 20% compared to the previous year and headline earnings per share are projected to increase substantially by between 20% and 30%,” says NBL.

The group says the increase is mainly attributable to increased production volumes supplied to Heineken South Africa that mitigated softer Namibian volumes. Results released in the previous year show that NBL delivered a solid performance for 2016, growing operating pro?t and Namibian beer volumes by 6.7 percent and 8 percent respectively while turnover was down by 0.3 percent having been mainly affected by mass migration to South Africa. Meanwhile, the 2016 indications that Namibian beer volumes continued to grow and increased by 8 percent compared to 2015 show that this was driven predominantly by Tafel Lager sales.

last ?nancial year also saw the launch of two new beer brands, King Lager and Amstel Lite with the former being the ?rst commercial beer brewed from local barley. NBL’s barley project is expected to create an additional 2 500 Namibian job opportunities over a 10-year period which is in line with NBL’s target of growing 4 000 jobs by 2019. Meanwhile, NBL will publish its audited ?nancial results for the month ended 30th of June 2017 on the 15th of September.