Monday, October 26, 2020

Sefalana profits rise despite foreign exchange headwinds

The Botswana Stock Exchange (BSE) quoted consumer goods retailer, Sefalana Group said Friday that it has remained competitive during 2015 despite trading challenges that included foreign exchange volatility. 

Group Managing Director, Chandra Chauhan who was presenting the group’s financial results for the year that ended 30th April 2016 said that other challenges that Sefalana faced included water and power shortages as well as delays in awarding of government tenders. 

“The Namibian Dollar is weakening and diluted Namibian contribution while Kwacha weakening diluted net investment in Zambia. With the USD strengthening, there is more expensive grain for foods Botswana,” he stated. 

The group financials shows that Metro Namibia contributed 29 percent and 10 percent of the Group’s revenue and Profit before Tax (PBT) respectively, for 2015. The results include a full 12 months of trade compared to 10 months in prior year, with an 87 percent increase in PBT this year. Metro took over 14th store in November 2015 located in Swakopmund, a step towards the medium – term target of 20 stores across Namibia. Other potential sites in Namibia are said to be considered for additional store openings. 

Group Finance Director Mohamed Osman said there are delays experienced in awarding of 2015/16 tender which made Foods Botswana (Pty) Ltd completely reliant on private customer sales for almost 4 of the 12 months. He added that partial contract awarded to Foods Botswana which delivered all allocated volumes and subsequently supplied regions where other tenders failed to deliver 

“Foods Botswana asked to double up on awarded quantities from November 2015 onwards which enabled a partial recovery from the 4 months gap between tenders in first half of year,” said Osman. 

On the other hand, Sefalana’s FMCG in Botswana contributed 64 percent and 48 percent of the Group’s revenue and PBT respectively, for the year. The company opened new stores in Mogoditshane and Hukuntsi during first half of year. The company stated that better product offering and an enhanced shopping experience has been welcomed by customers. 

Still on Friday, Sefalana said Botswana retail division is gaining traction as number of stores increases and awareness of brand improves and also growing a Star house brand range of products offers customers very good quality products at competitive prices to traditional brands. 

The company’s financial results published on Friday shows that for the year ended 30th April 2016, the group’s revenue was P3.8 billion up 10.4 percent on prior year, while Gross profit was P310.2 million going up by 9.7 percent on prior year. The group’s profit before tax was P207.1 million which also went up by 8.4 percent. 

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