Sechaba H1 profits high

 

Sechaba Brewery Holdings Limited interim results have ballooned, largely due to increase in production and cost cutting measures introduced, company directors have said.

For the six month period to September 2013, the company has posted a profit of P88, 6million- a noticeable increase when compared to P69, 7million in the same period last year. However, the Botswana Stock Exchange listed brewer is concerned that the current regulatory regime on clear and opaque beers would be a blight in their balance sheet going forward.

Managing Director Johan De Kok and acting Chairman Batlang Mmualefe said total beverages volumes declined 5 percent, with alcohol volumes plummeting 8 percent as a result of traditional beer regulations introduced last year. Source Water and Mageu contributed to a rise in non-alcoholic beverages volumes. Botswana Bureau of Standards (BOBS) recently accredited Source Water making it the only water brand to be accredited by the standards institution locally. Sechaba, which boasts a market capitalisation of P2, 4billion said operational expenses increased during the period under review.

The company carried maintenance exercise for ageing plants during the period. Meanwhile, the company has not stated how much its special Chibuku -currently being sold in South Africa-has contributed to the results.

President Ian Khama has announced plans to hike the alcohol levy, which is likely to impact on the company’s profitability going forward. The levy currently stands at 45 percent. “Looking ahead, the trading environment for alcohol related products is expected to remain challenging as the impact of the traditional beer regulations and the levy on alcohol beverages continues to be felt by consumers,” said Mmualefe and De Kok.

At the close of markets Wednesday, the company’s share price traded at 1826 thebe after it jumped by 1 thebe.