Analysts give thumbs up to NBL results

Local market analysts have lauded NSX listed Namibia Breweries Limited for posting solid interim results for the period ended 31 December 2012.
NBL announced Monday that for the six months ended 31 December 2012, operating profit jumped 17% to N$ 234 million while revenue increased 14% to N$1.2 billion. Earnings per share was up 1% to 58.7 cents. The company declared an interim dividend of 31 cents per ordinary share, 15% up from the comparative period.
Local beer sales (up 13%), particularly Tafel and Windhoek Draught, and royalty income which   jumped 46% as well as Virgo sales with year-to-date volumes of 15000 hectare litres sold, helped grow margins.
The results were achieved despite an increase in operating costs attributed mainly to the depreciation of the Namibian dollar against the Euro and the US$ and the high sin tax of up to 40% imposed by the Botswana Government, a key export market. Also NBL says above inflation increases in electricity and water costs weighed heavily on margins.
Tega Shiimi yaShiimi, CEO of Sanlam Namibia expressed surprise at the impressive results. He said:  “I am a bit surprised that their top line has increased by 17% which is always good news.I think that relative to last year, the results are much much better. Remember they had that big loss on the South African JV.”
Marius Alberts MD of Absa Namibia said the results were good considering the economic conditions. He said: “Within the economic conditions the results are very good. Even their increase in headline earnings is very good. Most of the big banks don’t show growth figures like that. I think they have used their resources quite good to show a growth like that. Their expansion programme is working for them.”
Commenting on the results, NBL MD Hendrik van der Westhuizen said: “Obviously with the Namibian dollar depreciating against the Euro and the US$ and us importing a lot of our raw materials that is the challenge. With that we have our forward cover in place. We cover future buy-ins when the rate is favourable and not as aggressive as it is now.”
He added that growing own malted barley will help cushion Namibia Breweries – currently operating at full capacity of 2.7 million hectare litres – against rising input costs.