Zam­brews half year earn­ings triple as 2017 trad­ing con­di­tions im­prove

Zambian Business Times - - BUSINESS REVIEW -

LUSAKA Stock Ex­change listed clear beer man­u­fac­turer Zam­bian Brew­eries Plc had a strong half year end­ing 30 Septem­ber, post­ing a triple earn­ings num­ber of ZMW198mil­lion com­pared to ZMW62.5mil­lion a year ago ex­actly. This rep­re­sented a 218% rise in earn­ings. Driv­ers of this stel­lar per­for­mance were ex­change rate gains due to a more sta­ble ex­change rate en­vi­ron­ment com­pared to pre­vi­ous pe­ri­ods volatil­ity. The com­pany’s rev­enues slid a mar­ginal 3% driven by a de­cline in pro­duc­tion vol­umes at 1.151HL but was cush­ioned by sta­bil­ity in the dol­lar – kwacha ex­change rate which re­al­ized a ZMW7mil­lion in ex­change rate gains ver­sus a ZMW49mil­lion loss a year ago ex­actly. A fur­ther con­trib­u­tor was de­cline in bor­row­ing costs than thinned the com­pany’s in­ter­est cost line as a re­sult of the bench­mark lend­ing rate cuts by Bank of Zam­bia in the year. The beer man­u­fac­turer as­set size also grew by 23% funded by share­holder’s funds fol­low­ing cap­i­tal in­jec­tions in the pe­riod half year pe­riod.

Trad­ing con­di­tions were gen­er­ally less tur­bu­lent com­pared to 2015/2016 fi­nan­cial year that was char­ac­ter­ized by high in­ter­est and ex­change rate volatil­ity im­pact­ing sta­bil­ity of earn­ings. The half year to Septem­ber 2017 saw soft drink vol­umes slide by 34% on the back of com­pe­ti­tion from new soft­ies on the mar­ket. How­ever, this was off­set com­pletely by a rise in beer vol­umes by a quan­tum of 8.3% – key driver of the rally be­ing ea­gle lager a do­mes­tic low cost brand and cas­tle lite a premium brand in the in­ter­na­tional seg­ment. Zam­brews mar­ket share slid to 93% fol­low­ing the sale of the Miller brand to its com­pe­ti­tion. How­ever, the com­pany aims to re­coup the lost share through pen­e­tra­tion of the in­ter­na­tional mar­ket with its lo­cal brands such as Mosi Lager.

As at close of busi­ness on 29 De­cem­ber ZAMBREW stocks traded for ZMW6.84 a share on Zam­bia’s bourse the Lusaka Stock Ex­change – LuSE.

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