The Sechaba group of companies Botswana Breweries (Pty) Ltd, (BBL) and Kgalagadi Breweries (Pty) Ltd, (KBL) Sechaba said the half year results which ended 30th September 2009, has recorded one of the worst financial performances in the history of the company.

"Substantial declines in the clear beer and sorghum beer sales, resulted, mainly due to the 30% alcohol levy introduced during November 2008 in the poor financial performance," the unaudited results for half year ended September 30th reads.

According to the results, the sales volume of clear beer and sorghum beer declined by 35 and 14 percent respectively during the period under review.

The alcohol industry is said to have experienced large-scale migration in peoples'drinking habits, moving from low alcohol products and cheaper goods. Non-carbonated beverages volumes declined by 4 percent, whilst soft drinks beverages registered a below par growth.

"Consequently, the soft drinks volume registered a below par growth of 4% and the non-carbonated beverages volume declined by 4%," said the statement.

The group saw its turnover for the period decline by 27 percent with the gross profit also going down by 13 percent compared to the previous year. Though the companies were able to reduce production costs as the pressure on commodity prices and grain prices eased, and the Pula gaining strength against the US dollar and Euro, prices of packaging material continued to hike.

"The packaging material prices; cans, PET, glass and closures, continued to climb while substantial depreciation of the Pula against the South African Rand also added to the cost pressure towards the end of reporting period."

The results further shows substantial shift in volume mix from cans to bottles also resulted in higher distribution and production costs. KBL's operating profit declined by 36 percent while that of BBL was down by 12 percent compared to the year before. 

"Profit after tax was down by 36 and 10 percent respectively for the two entities," said the results. 

Overall, the results shows that Sechaba recorded a decline in profit after tax of 30 percent resulting in a drop of 14 thebe in the total net dividends declared during this period. 

KBL launched a new local premium beer brand called St. Louis Export during the period under review, which captured over 3 percent of the market share by the end of the period.