On 18 August 2022, Zambian Breweries announced the Interim Results for the six month period ended 30 June 2022.
Financial Review
The 2022 financial year has remained positive for the business so far with the first half year recording double digit growth in revenue over prior year driven by consumer demand for our brands, as well as progressive easing off of COVID-19 restrictions that partially impacted prior year results. The general economic environment has also presented relatively stable factors notably so the exchange rate against major trading currencies which has not only softened, but also remained impressively predictable allowing for better cost forecasting and control.
A high level summary of results for the first half year relative to prior year is as follows:
• Total Revenues grew 22% owing to volume growth driven by high margin core and premium global brands.
• Profit before tax grew 51% owing to the strong top-line performance as well as excellent cost control of both operational and financial costs.
• The business remains liquid with a positive cash position of ZMW 256.4m with a strengthening balance sheet.
Strategic Review and Prospects
Over the past ten months, Zambia has experienced increasingly improved and stable economic indicators coupled with favorable copper prices and reduced COVID-19 related business risk. This presents a generally positive outlook for the rest of the year with the IMF projecting a real GDP growth of around 3.1%. For the business, such a positive economic environment provides a viable opportunity for sustainable growth and investment into our current operations ultimately contributing to the current economic growth trajectory and creation of both direct and indirect employment throughout our forward and backward value chain.
The industry continues to experience unprecedented demand for our strong and diversified portfolio of brands which remain the consumer’s first choice, this along with our world class commercial strategy enables us to continue delivering our growth targets and consumer preference. As part of the wider AB-Inbev Africa group, the company continues to actively pursue ambitious growth opportunities as demonstrated by the already announced major expansion plan for the Lusaka Brewery Plant, reinforces the company’s going concern position.
Sustainability Update
Creating a future with more cheers requires us to look at our sustainability and environmental impact under five key pillars: Smart Agriculture, Smart Drinking, Water Stewardship, Circular Packaging and Climate Change.
Our Smart Agriculture initiatives include partnership with the UN World Food Programme to monitor and assess the performance of sorghum farming in Gwembe District, of and Silverlands and Musika in Zimba District. During the period we also launched the cassava buying harvest in Luapula and Northern Provinces and sorghum buying season in Southern Province.
Our Smart Drinking initiatives included partnership with the Churches Health Association of Zambia (CHAZ) to help the AB InBev Foundation and the Zambian government address the harmful consumption of alcohol
through a Screening and Brief Intervention (SBI) programme in selected Lusaka clinics. This is an on-going initiative.
Under Water Stewardship our initiatives included a tree planting event with Lusaka Water and Sewerage Company at the George Compound Community Industrial borehole.
Meanwhile, our Circular Packaging initiatives covered the Manja Pamodzi partnerships with Java Foods, Yalelo Zambia and Nomad’s Court Hotels and Lodges to collect recyclable waste from their business premises. We also empowered our network of refuse collectors and aggregators with digital financial skills through our technology-based payment platform called BanQu.
Meanwhile, our Climate Change initiatives included Investing in the technological upgrade and expansion of our Mungwi Road brewing facility plant to reduce carbon emissions.
Dividend Declaration
At a Board meeting held on Wednesday 3rd August, 2022, the Board resolved not to declare an interim dividend for the period 1st January, 2022 to 30th June, 2022.