By BUUMBA CHIMBULU
THE balance sheet for Zambian Breweries remains liquid with a positive cash position of K185.8 million despite a significant fall in profit before tax, says company Secretary, Deborah Bwalya.
Profit before tax for the company fell significantly to K15.489 million as at June 2020 from K192.953 million the previous year.
Ms Bwalya said in the Interim Results for the six months period ended June 30, 2020 posted on Lusaka Securities Exchange (LuSE) that profit before tax fell significantly relative to prior year into a loss position.
She attributed the loss to significant unrealised foreign exchange loss that the business recognised following a revaluation of all outstanding group debt.
“This was in response to the massive devaluation of the Kwacha in the first quarter of 2020 to reflect the correct value of this debt position.
“Further pressure on profit before tax was due to an increase in cost of production driven by the weak exchange rate, which was reflected in the 16 per cent drop in current year gross profit,” she said.
Ms Bwalya said the total volumes grew four percent driven by affordable beer brands.
She said customers favoured the affordable segment over core and premium brands as their disposable income was eroded by the difficult economic conditions. Ms Bwalya said total revenue grew by five per cent owing to volume growth and lower excise tax on the affordable beer segment.
“The Covid-19 pandemic will stand out in history as a world-changing event, resulting in significant losses of human life and posing dramatic challenges to our global and local economy.
“In the face of this unprecedented situation, our management team would like to extend its gratitude to its staff and stakeholders for the results posted year to date considering such a challenging period,” she said.
Ms Bwalya said the company was still operating through the off-premise channel (distributors, wholesalers, liquor stores and supermarkets) and some emerging on-premise retailers trading through their restaurant businesses.
“We have temporarily re-sized our business and our employees have been working from home where possible, with only a portion working on site to keep operation running,”she said.
By BUUMBA CHIMBULU