By STUART LISULO
National Breweries Plc has posted total losses of K237.6 million during its financial year ending March 31, 2023.
Company Secretary Simbarashe Banga said in a statement this had been induced mainly by a kwacha depreciating against major convertible currencies.
In a statement announcing its audited results for the financial year period ended March 31, 2023, National Breweries posted increased losses of K237.6 million during the period under review from around K120.3 million in the same period in 2022, largely attributed to higher finance costs induced by the depreciating kwacha against major currency convertibles.
While the kwacha traded at an average of K18.05 per dollar at the end of the first quarter of 2022, the local currency rapidly depreciated to hit K21.40 per dollar by the end of the first quarter of this year.
“The Company posted an operating loss of K194.3 million during the period against a loss of K88.2 million in the prior year. This resulted in a loss after tax of K237.6 million (2022: K120.3 million) and a loss per share of K3.77 (2022: K1.91) on account of higher finance costs and higher exchange losses on foreign currency liabilities due to the depreciating kwacha.”
Other than the depreciating local currency, which increased production costs of imported packaging materials, the company faced major headwinds in the increased price of maize, the impact of higher distribution costs, and the increase in excise duty, hiked at the beginning of 2022.
However, Banga added that National Breweries implemented a turnaround strategy during the period under review, designed to boost volume growth.
“The implementation of the turnaround strategy continued during the second half, which saw the launch of a new product offering, Chibuku Super Banana; continued expansion of depot footprint in strategic areas around the country and deployment of competitive packs to fight competition in the congested trading space of Traditional African Beer.
“The volume recovery registered in the second quarter continued in the third and fourth quarters resulting in the second half volume closing 66 per cent above prior and annual volumes closing 28 per cent up on the prior year. The affordable offerings contributed to the larger sales volumes during the year. The fourth quarter, however, saw an increased acceptance of the mainstream products, providing opportunities to recover profitable volume.”
National Breweries Plc produces and distributes Traditional African Beer (TAB) under the market-leading Chibuku Shake Shake and Chibuku Super brand names.