Namib Breweries profits expected to soar
Latest indications by analysts are that Namib Breweries’ profit after tax and earnings per share for the period ended 30 June 2018 are expected to increase.
The growth in profit is anticipated to be by between 20% and 30% compared to the previous year.
NBL’s profit after tax sank last year by 14.5% to N$318 million on account of a challenging year, which was characterised by severe drought, unpredictable exchange rates and rapidly shifting consumer tastes
According to an economist, Eloise Du Plessis, the increase in profits is as a result of NBL’s investment in Heineken SA delivering exceptional performance, with growth in volume and operating profit for the period, ahead of the original business case.
She said, “Shareholders are also reminded that, during the previous comparative period, the results were impacted by the increased share of losses in the associate (Heineken South Africa) mainly as a result of the final fair value adjustments from the conclusion of the previous joint venture agreement. Operating profit is expected to be relatively constant compared to the previous year.”
NBL’s Namibian beer volumes also shrunk by 3% last year, but the decline was offset by a 46% increase in volumes sold to Heineken South Africa, thus achieving an overall volume growth of 8%.
Management of NBL, while preparing financial statements for the Group for the period ended 30 June 2018, noticed that the treatment of losses in associate in determining the headline earnings was not in line with Circular 02/2017 issued by South African Institute of Charted Accountants.
The headline earnings as previously stated were N$474.2 million, and the Headline earnings per share (“HEPS”) was 229.6 cents per share.
The prior year treatment of losses in associate in determining the headline earnings represents a previous period error which must be accounted for retrospectively. Consequently, NBL has adjusted the comparative amounts presented in the current year's financial statements affected by the failure.
The third statement of financial position as at the beginning of the preceding period has not been presented as the retrospective restatement did not have a material effect on the information in the statement of financial position at the beginning of the preceding period.