Breweries report net revenue increased 12.1% in fiscal 2023
By Clifton Movirongo.
Namibia Breweries Limited (NBL), a Heineken subsidiary, recently announced its financial year-end results for 2023 as a merged business, reporting that despite “lower volumes and difficult market conditions,” net revenue increased by 12.1% to N$3,388 million.
“Sales volumes to South Africa boosted revenue growth. However, beer volumes started showing strain throughout the region at the end of the financial year. The contribution from export markets dropped as hard currency availability hampered sales,” NBL said in statement.
Furthermore, revenue from the Distell Namibia merger of N$246 million has been included in the group’s results from the effective date of acquisition, while royalty income from NBL brand sales in South Africa also increased by 12.5% to N$166 million.
“Due to unprecedented inflationary effects, consolidated operating expenses increased by 26.1% to N$2 967 million, affecting all cost items from raw materials to transportation and packaging. Glass costs increased by 25% on average, while malt increased by 37%. This was exacerbated by the Namibian dollar’s deteriorating exchange rate against the Euro and US dollar,” the statement continued, noting that consolidated normalised operating profit decreased compared to last year due to reduced sales volumes and cost increases.
“Lower production volumes also caused an ineffective allocation of fixed overheads. Consolidated operating profit for the year was also influenced by expenses related to finalising the transaction with Distell Namibia and Heineken South Africa.”
NBL Managing Director Peter Simons asserted that “as a proudly Namibian business, the company is committed to invest in the economy of the country,” while at the same time positioning itself for future growth.
“We continue to evolve NBL into a future-fit business in a tough economic climate. Increased operating costs due to higher interest rates and exchange rates are impacting current performance while we also balance the need to continue to invest in our infrastructure. Although volumes are currently under pressure due to lower consumer demand, we are confident in our longer-term plans and ability to continue to drive and realize synergies through our integration,” he said.
Finally, NBL maintained that it remains resilient in the market, building on the strong foundations of the past while embracing change to grow the local economy and take Namibian brands to the rest of the world. “As a proudly Namibian business with a “strong” local heritage of over 100 years, NBL remains listed on the Namibian Stock Exchange with its headquarters in Windhoek.”