Sechaba records 118 percent profit increase
The drinks have been flowing and so has the cash for Sechaba Breweries Holdings Limited (SBHL), recording a 118 percent increase in profits.
The company, which owns a 49.9 percent stakein Kgakagadi Breweries Limited (KBL), attributes the stellar returns to a strong volume performance, higher net revenues and benefit of overall savings in costs.
“Each business is doing significantly better as separate entities owing to focus on specialised areas and focused marketing and distribution efforts,” reflected the company board chair, Thabo Matthews in the statement accompanying the financial results for the half year period ended 30 June, 2019.
Overall, Sechaba volumes grew by 14 percent during the six-month period.
During the period under review, Sechabaraked in profit after tax of P37.2 million, from P7.4 million recorded in the previous corresponding period.
In the past, the company had to battle with the controversial Alcohol Levy, introduced in 2008 by former President, Ian Khama in an apparent bid to fight excessive alcohol consumption.
However, the move backfired.
A recent KBL survey found that alcohol consumption actually increased, with people resorting to beers with higher alcohol content.
Sechaba breathed a sigh of relief last year when Khama’s replacement, President MokgweetsiMasisislashed the levy from 55 percent to 35 percent. Masisi then went a step further, extending trading hours of liquor places.
Sechaba, brewers of Black Label and St Louis, says all categories recorded a modest to significant increase in volumes besides Traditional Beer, which recorded a decline.
As well as enjoying a considerable piece of the KBL pie, Sechaba’s other associate is Coca Cola Beverages Botswana (CCBB) where it also has a 49.9 percent stake.
However, the major contributor to Sechaba revenue is KBL, which separately recorded a profit before tax of P196.4 million.
CCBB on the other hand made a profit before tax of P46.8 million, from P16.1 million recorded in the previous year.
Sechaba board of directors, led by Matthews, has for the current period declared an interim dividend of 54 thebe per share.