- Cash and cash equivalents up 122%
- Receives P57m dividends from associates
- Covid-19 alcohol bans affected performance
The national brewer, Sechaba Brewery Holdings Limited (SBHL) in 2021 recorded a significant growth on its assets portfolio which closed the year at P928 million compared to P764 million value in 2020.
Sechaba board chairman Tabuya Tau disclosed on the company’s 2021 Annual Report released this week that the 21% increase from P764 million to P928 in total assets was attributed to the 17% increase in investment in associates and the increase in cash and cash equivalents.
According to her, cash and cash equivalents grew by 122% at P68 million compared to prior year due to dividends received in 2021.
“It was noted that the increase in net revenue for associates resulted in higher dividends being declared in 2021.Post reporting period, the company received P57 million dividends from its associates. The Board declared and approved dividends amounting to 98 Thebe per share at its meeting in March 2022,” said Tau in chairman‘s report.
Furthermore, Tau said in overall, the company is in a good position from a liquidity perspective with adequate cash to cover operations in the year ahead.
Commenting on the financial performance, Tau said SBHL achieved a profit before tax of P219 million, a 30% increase from P168 million in 2020, the comparative period.
She said the main driver for this performance is the results of the Associates during the period as the Sechaba Brewery income line comprises mainly of share of results of the Associate entities.
“The Associates have experienced improved performance relative to 2020 with total combined volumes increasing by 11% for the year 2021. The improved performance was due to the eased Covid 19 related controls and restrictions, which included the lifting of the alcohol ban,” she said.
Sechaba Managing Director Faith Nteta said the financial year 2021 has been a difficult year, not only for Sechaba Brewery Holdings Limited but also for the country and the global economy as a whole.
“This was mainly due to the dreaded COVID-19 pandemic, which negatively affected the human race and global economic sustenance. The year was however better than the preceding year, 2020 due to the lifting of the alcohol ban and normalisation of operating hours for the alcohol industry value chain participants following COVID-19 vaccination of the population,” she said.
Nteta also added that the dynamics of the beverage industry continue to evolve and SBHL performance will improve as the associates continue to grow through increase in sales volumes and the implementation of cost control measures to maximise returns, maintain shareholder value and achieve shareholder confidence.
The company said Kgalagadi Breweries Limited (KBL) was hit by the alcohol bans during 2021.
“Overall, KBL was unable to trade for a total of 126 days of the year, as compared to 96 days in 2020. KBL performance and growth in the year 2021 was further impacted by other restrictions on the sale of alcohol, chief amongst them the restriction of unlicensed individual customers from purchasing alcohol directly from reseller outlets (or wholesalers) and the prohibition of events,” said the company.
However, unlike the previous year, SBHL KBL performance improved when compared to the previous year, as total volumes grew 4.7% versus 2020, largely due to improved efficiencies around availability of stock.
“This performance still fell significantly short versus 2019 performance – with a volume declined of 25.9% – due to zero recorded volumes in periods of no trade. The company once more showed a great resilience and agility to execute initiatives and deliver sales volumes in a highly regulated and challenging market, thus resulting in improved volumes,” said SBHL on KBL operational report part.