Namibia Breweries declares 27c dividend

Namibia Breweries has declared an interim dividend of 27 cents after recording a 9% increase in earnings to 58 cents per share in the six months ended 31 December 2011. The increase was at the back of a 13% growth in revenue underpinned by strong beer volume sales.
Revenue increased to N$1.07 billion up from N$947 million in the comparative period with profit after tax also increasing 7% to N$120 million (N$111 million in 2010).
Namibia Breweries financial director, Bruce Kidner said growth was influenced by significant brand investments made, reflected in the increase in administration and marketing expenses. He said: “NBL invested across the portfolio, but particularly on the Tafel brand and the Windhoek Trademark. The new contemporary packaging for the Windhoek Trademark, the research costs of which were incurred during the period, was launched in March 2012. This has impacted overall margins which are 19%, down 1% from the last period.”
Beer sales volumes in the local market grew by 6% compared to the last period, with the Tafel brand being the main driver of growth. The business made a significant investment in Tafel in the period and the brand benefited from new labelling, and the launch of the “Freedom of choice” campaign which was rolled out nation-wide. This investment has helped accelerate the strong growth in Tafel Lager in the period under review. Windhoek Draught also continued to perform well contributing to the overall growth in volumes.
The South African joint venture, DHN Drinks, continued to grow its portfolio, with increasing sales compared to the prior period.  The Windhoek Trademark’s success continued to be underpinned by Windhoek Draught, which delivered double digit growth. The operating loss attributable to DHN Drinks decreased compared to the previous period – N$32 million down from N$37 million.
The export markets outside South Africa continued with their mixed fortunes. Brands, spearheaded by Windhoek Lager and Windhoek Draught, are growing in Zambia, Cameroon and Uganda while despite a contracting formal beer market in Botswana, following a successful national consumer promotion, Namibia Breweries has managed to hold its market share.
On the other hand, the business’ rate of sale in Zimbabwe has slowed and Angola sales have been hampered by importation challenges. The company said it still remains hopeful to increase sales in the United Kingdom by improving its route to market.
Going forward, whilst the recent brand investments have impacted operating margins, it is expected that the business will benefit from these investments.
“The Namibian market has returned to steady growth and this is forecast to continue. Whilst the South African market is highly competitive, NBL is confident that its portfolio of African and International brands will carry on growing. Other export markets will continue to get increasing focus as the source of new sales opportunities.  In the short term, financial performance is expected to continue at similar levels for the remainder of the financial year,” Kidner said.