Sechaba records 18.8 % decline

SHARE   |   Monday, 23 November 2015   |   By Staff Writer
Sechaba records 18.8 % decline

Sechaba Brewery Holdings Limited (SBHL0 says the ongoing water and power shortages have affected the performance of the Non-Alcoholic Beverages category, but more especially the Traditional Beer category.
The company said in a its unaudited result for the half year ended 30 September 2015 that traditional beer volumes declined by 18.8 percent against the previous year partly  also due to the continuing impact of the Traditional Beer Volumes which has forced the company to close its Lobatse plant citing the same reasons.
Kgalagadi Breweries Limited (KBL) which is the sole associate of Sechaba has seen its total volumes decline by 0.74 percent, with clear beer, alcoholic fruit beverages and Sparkling soft drinks said to be showing promising growth.
The company says the challenges faced by KBL due to the Traditional Beer Regulations still exists, however it says efforts are being made to find appropriate routes to market within the regulations.
Traditional Beer Regulations which were introduced in 2012 and abolished the sale of traditional beers from homesteads and sell it from established depots has been a sore for KBL since the introduction of the law.  Even when KBL vowed to assist those affected by the law in finding them spaces for retail, it appears the law which also reduced trading hours is still fully addressed as evidenced by the decline in traditional beer volumes.
The other major undoing of Sechaba and its associate, KBL is the alcohol levy which is currently pegged at 55 percent with another hike expected sometime soon. The levy which was first introduced in 2008, along with other regulations has been regularly named as the major contributing factor to the KBL declining volumes.
During the six month period under review, Sechaba operating profit increased 6.8 percent P106.3 million while profit after tax increased by 5.02 percent to P99.2 million.
The Sechaba shares were on Friday trading at 2950 Thebe share

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