National Breweries Plc Posts 66% Growth in Volumes – Strategies to Overcome Headwinds

Published On: July 31, 2023Company: National Breweries Plc (NATBRW.zm)
What are some of the headwinds National Breweries Plc faced during the period under review?
National Breweries Plc faced headwinds arising from a weakening Kwacha which increased production costs of imported packaging materials, an increase in the price of maize due to opportunistic and speculative pricing, higher distribution costs due to the impact of petroleum products pricing, and the impact of the Excise Duty regime being increased at the beginning of 2022.
What key changes has National Breweries Plc made to increase their performance?
National Breweries Plc has launched a new product offering, Chibuku Super Banana, expanded their depot footprint in strategic areas around the country, deployed competitive packs to fight competition in the congested trading space of Traditional African Beer, and is developing local suppliers for reduced costs and supply lead times.

Overview

  • Turnaround strategy continued during the second half – introducing Chibuku Super Banana, expanding depot footprint, and deploying competitive packs
  • Second-half volumes closed 66% above the prior period and annual volumes closed 28% up on the prior year.
  • Affordable offerings contributed to higher sales volumes
  • Headwinds from weakening Kwacha, maize pricing and supply situation, petroleum products pricing, and increased Excise Duty rates
  • Posted operating loss of K194.3m against the prior year’s K88.2m
  • Posted a loss after tax of K237.6m (2022: K120.3m) and loss per share of K3.77 (2022: K1.91)

Corporate Governance

  • Remained committed to regulatory compliance and strict corporate governance culture
  • No breaches of corporate governance and anti-bribery codes

Prospects

  • The excitement around diversified product portfolio provides a base to grow volumes
  • Expanding distribution footprint and improving customer service in underserviced areas
  • Focus on increasing volume performance and value of mainstream and Chibuku Super offerings
  • Developing local suppliers for reduced costs and supply lead times

What are some of the headwinds National Breweries Plc faced during the period under review? National Breweries Plc faced headwinds arising from a weakening Kwacha which increased production costs of imported packaging materials, an increase in the price of maize due to opportunistic and speculative pricing, higher distribution costs due to the impact of petroleum products pricing, and the effect of the Excise Duty regime being increased at the beginning of 2022.

Useful links

About National Breweries Plc (NATBRW.zm)

National Breweries Plc is a leading Zambian beverage producer listed on the Lusaka Securities Exchange. The company is a major producer of beer, lager and other alcoholic beverages, catering to both domestic and international markets. Its brands are widely distributed throughout the country and beyond, contributing to over 5% of Zambia’s total beverage production.

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