Saturday, April 4, 2020

Beer fume drives up Sechaba Holdings profits

Sechaba Holdings Limited, the country’s biggest brewer’s fortunes swang up at half year reporting period driven by pent-up beer demands in both local and regional markets- putting the organization into gear of making some inroads into the southern Africa’s biggest market of DRC and South Africa.

KBL, the beer and soft drink division of Sechaba Holdings, said beers fume steered operating profits up 15 percent during the six months to end of September to P 81 117 million from P 70 million during the same period in the previous year .
The sterling performance was supported by beers volumes which recovered from -12.8 periods.
KBL’s Managing Director, Hloni Matsela, told The Sunday Standard on Friday: “This is all about our strategies which are now falling together. I’m very upbeat about the future and, I think, this growth will continue into the next year and even beyond,” he said.

The brewer said all their brands contributed to the positive results that were shown at half year result but stressed that St. Louis still remains its “star performer” among the beer brands in its stable.
Aggressive measurers were taken by mid year to close the gap that was left by AmstelÔÇöthe Dutch beerÔÇö following an argument over licencing rights in southern Africa to KBL’s parent company, the giant SABMiller.

SABMiller hit back by introducing a line of premier beers in its stable, which included Peroni, the Italian beer, and Hansa Marzen Gold, Castle Light and Miller.

“Peroni was very positively received in the local market and it is growing within our expectations, “he said.

He added: “We have managed to close a number of gaps that we had and are very positive about the future growth. One other thing which is working in our favour is the economy which has turned around.”

Further, to seal the gap at the lower end of the market, KBL introduced the 750 ml of bottled beer in its attempt to get into the South African market.
“We are currently exporting into the regional markets, in particular South Africa and DRC. In South Africa, we are exporting to the Rustenburg and Mafeking areas. And our 750 ml bottled beer is doing well there,” Matsela said.

“We have invested heavily on our glass float. And the shortage that affected South Africa at mid year did not affect our operations,” he said.

The brands that are being exported to South Africa are Carling Black Label and Castle Light while Olhsons is doing well in the DRC.”

Some of the new developments in the market aimed at driving up growth include the re-branding of St. Louis through its new containers and well crafted campaign running under the slogan “St. Louis. Our People. Our Time”.

The slogan is intended to sensitise Batswana to buy the local product but its impact has not been felt on the balance-sheet because it started during the close period. However, St. Louis still controls about 52 percent of the local beer market.

During the same period, soft drinks volumes, which have had a slump during the first six months, shot-up 16.3 percent from -8.1 percent- a swing of 24.4 percent.

However, Botswana Breweries Limited, a subsidiary of KBL, showed a profit growth of five percent as it was being dragged down by the poor performance of Chibuku.

“Chibuku went down over the period because of a number of reasons. Firstly, there is stiff competition in the market and, in the past year, we did not make price increases. Then we increased prices by 11 percent and it has affected our sales,” he said.
Overall Sechaba recorded an impressive 14.2 percent growth in profit after tax which resulted in an increase in the total dividend declared during the period from 38 thebe to 43 thebe per share.

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