KBL sales volumes continue to decline
Isaac Pinielo | Tuesday August 15, 2017 18:00
In the six months to June 30, 2017, KBL suffered a 6.3% slide in total sales volume to 909,800 hectolitres from 970,700 hectolitres in the prior year. Sechaba, which holds a 60% shareholding in KBL with the remainder owned by AB InBev, saw a decline of 13.9% in profit after tax (PAT) from P55.1 million to P47.5 million the previous period.
KBL is involved in the manufacturing, import, and distribution and marketing of a range of clear beers, alcoholic fruit beverages, soft drinks, purified water, opaque beer and other non-alcoholic drinks.
Group managing director, Johan de Kok acknowledged that all categories recorded a decline with the exception of non-alcoholic beverages.
He noted that the decline in the financial performance of the company is mainly attributable to the current challenging regulatory environment in which the company operates coupled with a decline in the overall sales volume.
“The change in the alcohol levy regulation effective 1 April 2016 will continue to have a significant impact to the financial results of the company,” said de Kok. The levy rate for alcohol content of five percent and less was changed to 50% and for alcohol content of five percent and more remained at 55%.
Additionally, the levy on locally produced alcoholic beverages was changed to include duty payable in terms of Customs and Excise Duty Act. The government’s repeated efforts to reduce alcohol consumption levels and crimes related to it by implementing liquor regulations since 2008 also saw reduced trading hours being introduced.
Under the regulations, bars only open at 2pm to 10pm from Sundays to Thursdays, while on Fridays and Saturdays, the bars open at 12pm until 11pm.
Recently, Sechaba’s woes were made worse following the take over of SABMiller by AB-Inbev which led to the local company announcing it has received notice from The Coca-Cola Company (TCCC) that the Bottlers’ Agreement in accordance with which KBL produces products licensed to TCCC, will be terminated.
The manner, timing and impact of the proposed termination however still remain the subject matter of ongoing negotiations and consultation with various stakeholders.
Meanwhile, the group declared a dividend of 28 thebe per share for the half year on July 26, 2017, which shall be paid on September 5, 2017.