Business Reporter
NAMIBIA Breweries Limited (NBL) today released their financial year-end results for 2023, in which the company revealed that its operating profit decreased by 36.9 % from over N$ 667 million in 2022 to N$ 421 million in 2023, due to decreased sales volume impacted by consumers having lower disposable income in light of rising inflation.
However, despite lower volumes and challenging market conditions, net revenue increased by 12.1% to N$ 3,388 million. According to NBL, this growth is not driven by volumes sold but is instead due to price increases on alcoholic beverages.
Surihe Gaomas-Guchu, Corporate Affairs Manager at NBL, said, “Revenue growth was facilitated by volumes sold to South Africa; however, beer volumes started to show strain throughout the region towards the end of the financial year. The contribution from export markets dropped as hard currency availability hampered sales,” Gaomas-Guchu said.
She added that revenue of N$ 246 million related to the Distell Namibia merger has been included in the group’s results since the effective date of the acquisition. Heineken NV offered to buy Ohlthaver & List Group of Companies (O&L)’s 50.01% stake in the national brewer and thus acquired the majority shareholding in NBL.
Gaomas-Guchu further explained that operating losses increased by 26.1% to N$ 2,967 million due to unprecedented inflationary effects, affecting all cost items from raw materials to transport and packaging. Glass costs on average increased by 25%, and malt costs increased by 37%. This was exacerbated by a deteriorating Namibian dollar exchange rate against the Euro and US dollar.
“Consolidated normalized 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 finalizing the transaction with Distell Namibia and Heineken South Africa,” Gaomas-Guchu said.
Managing Director of NBL, Peter Simons, said that currently, Namibia has the highest per capita consumption of beer in Africa and is ranked ninth in the world. He explained that due to this, the market has become oversaturated, with no prospects of growth in beer sales in Namibia as the market has already reached its maximum peak. He, however, said that Namibian beer is still the driver of net revenue for NBL.
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