E-Malt.com News article: 4413

Namibia, Windhoek: Namibian Breweries, one of the largest private sector employers in Namibia, has posted a fall in its headline earnings per share for the six months to end-December 2004 to 18.4 cents from 19.4 cents in the previous year. The Namibian-listed brewer declared an interim dividend of 5.5 cents per share, as well as having paid a special dividend of 16.5 cents per share, for a total dividend for the six months of 22 cents per share. This is double the 11 cents per share paid at the interim stage in 2003, Business Report posted on March 10.

Reporting its interim results on Wednesday, Nambrew said its total revenue fell slightly, to N$525.4 million from N$528.2 million the previous year, amidst very competitive conditions in both its local and export markets.

Operating profit before depreciation fell to N$63.1 million rand from N$66.78 million the previous year, but thanks to the favourable impact on depreciation of extending the useful life of some assets, totalling N$5.4 million in the six-months, operating profit rose 16 percent to 43.8 million rand from 37.6 million rand previously.

Net profit attributable to ordinary shareholders was 38.1 million rand, down from 40.6 million rand a year earlier. However, Nambrew said that its operating margin, at 8 percent, was slightly higher than that of 2003, in the face of a significant increase in marketing. Operating expenses fell by 2 percent, primarily due to production efficiencies and a strong domestic currency, and the group would continue to identify cost-saving opportunities, it pledged.

Also during the period it began brewing Heineken beer at its plant in Windhoek for the first time.

Locally, Nambrew said conditions in Namibia remained highly competitive in a low-growth market. However, the group's beer volumes had shown an increase over the prior period, due primarily to a good peak season that was driven by its increased marketing investment. Of its total revenue of N$525.4 million rand, N$227.6 million came from the local market, up from N$212.6 million previously, while N$297.7 million came from export markets, down sharply from N$315.6 million a year earlier.

Brandhouse, its South African joint venture with fellow alcoholic beverage giants Diageo and Heineken, currently only months old, had already demonstrated significant value in the South African market through shared synergies and expertise. This venture represented a doubling in marketing investment from Nambrew during the six months, it said, which had been funded from savings generated by the synergies realized.

In the group's other export markets outside South Africa, Nambrew said they all, and particularly Angola, remained a challenge. The delay in the ratification of the bi-lateral trade agreements continued to have an adverse impact on its export volumes.

The group's strategy was to grow a sustainable export business, and as part of this management were investigating new market opportunities, specifically in the SADC region. This need to be achieved in co-operation with the group's key shareholders to maximise economies of scale and to minimise the impact of currency fluctuations.

Looking ahead, Nambrew said it was confident it was progressing well on its journey to build a strong platform from which to drive sustainable profit growth. The joint venture was delivering as envisaged, and the incremental investment in the brands would continue to improve its position, which could already be seen in the strengthening of the equity of the brands. "The board believes that success will only be achieved through continual challenge and change, and is confident that the basics are in place to deliver," it concluded.


12 March, 2005