National Breweries on expansion path

By BUUMBA CHIMBULU
NATIONAL Breweries Plc is currently working on building capacity and expanding the distribution footprint, as it guarantees better availability of all products across more markets.
This is after the company’s portfolio of products significantly improved during the half year of 2021, laying a strong foundation for improved volume growth going forward.
National Breweries plc now includes more affordable products targeted at the lower end of the market and less impacted by rising costs of packaging, according to a commentary for the half year ended 30 September 2021.
“The company entered the affordable draught sector during the period under review in addition to introducing exciting new long shelf-life products with potential to grow volumes and significantly reduce distribution costs.
“Efforts to build capacity and expand the distribution footprint are progressing well and will guarantee better availability of all products across more markets than before,” the company stated.
According to the commentary, good progress was achieved in the company’s efforts to grow volumes during the half year under review, raising prospects of increasing benefits in the medium to long term.
It however indicated that the strengthening exchange rate in the last month of the half year also negatively affected Chibuku Super volumes in some markets.
The lower volumes resulted in a 14 percent reduction in company revenue compared to last year.
The company stated that margins were under pressure from the depreciating Kwacha during most of the half year.
“They were also depressed by distribution costs which peaked during the half year because of high demand for transport to move the national agricultural produce.
“The company therefore posted a half year operating loss of K67 million against a loss of K39 million for the prior year,” the company stated.
Financing costs increased by K3.3 million because of increased borrowings after conversion of the balance due to the major shareholder into a loan; however, the strengthening Kwacha resulted in an exchange gain of K69 million on revaluation of foreign currency liabilities.
The company, therefore posted a loss after tax of K13 million and loss per share of K0.20 versus a loss after tax and loss per share respectively of K77 million and K1.22 for prior year.