Nat­brew half year loss widens as il­le­gal Opaque beer mar­ket in­ten­si­fies

Zambian Business Times - - BUSINESS REVIEW -

• The opaque beer mar­ket has seen the mush­room­ing of un­li­censed brew­ers of tra­di­tional beer and home­made spir­its

• Nat­brew took some im­pair­ments from the close out of un­prof­itable seg­ments

LUSAKA Stock ex­change listed opaque beer man­u­fac­turer Na­tional Brew­eries Plc’s half year loss to 30 Septem­ber 2017, widened by 65% to ZMW20mil­lion as the com­pany grap­pled with com­pe­ti­tion from il­le­gal opaque beer man­u­fac­tures in the coun­try. The opaque beer mar­ket has seen the mush­room­ing of un­li­censed brew­ers of tra­di­tional beer and home­made spir­its. Nat­brews pro­duc­tion vol­umes shrunk 37% to 519Hls from 820Hls same time a year ago ex­actly. This trans­lated to a 28% slump in beer sales for rev­enue to ZMW142.15mil­lion. De­spite im­proved fun­da­men­tals such as re­duced bor­row­ing costs from an eas­ing mone­tary pol­icy by the Bank of Zam­bia in 2017, the com­pany’s mar­ket share has con­tin­ued to erode from com­pe­ti­tion from il­le­gal bulk tra­di­tional beer.

The com­pany also took im­pair­ment losses from a pre­vi­ous year’s busi­ness re­struc­ture where it took a strate­gic de­ci­sion to close out un­prof­itable seg­ments to min­i­mize its cost struc­ture. This cost the com­pany ZMW8.2mil­lion on its im­pair­ment lines. Op­er­a­tional loss nar­rowed to ZMW4.4mil­lion a 72% im­prove­ment from ZMW15.75mil­lion a year ago.

Na­tional Brew­eries is in the mid­dle of an eq­uity trans­ac­tion where Hein­rich’s Syn­di­cate Lim­ited’s sub­sidiary An­heuser – Busch InBev SA INV(NYSE:BUD) is in talks to sell its stake in Nat­brew to Delta of Zim­babwe an Opaque beer com­pany seek­ing to re­gion­al­ize its op­er­a­tions in South­ern Africa. A cau­tion­ary state­ment was is­sued to share­hold­ers to ex­er­cise cau­tion in trad­ing in light of the im­pli­ca­tions this deal would have on stock value.

As at close of busi­ness on 29 De­cem­ber NAT­BREW stocks were trad­ing for ZMW12.50 a share on Zam­bia’s bourse the Lusaka Stock Ex­change – LuSE.

Chibuku shake shake man­u­fac­tur­ing plant in Lusaka the cap­i­tal

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