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Resurgent KBL expects more bumper profits

MBONGENI MGUNI
KBL's St Louis lager PIC. THALEFANG CHARLES
Sechaba Brewery Holdings Limited, which owns 60% of Kgalagadi Breweries Limited (KBL), has told investors to expect a 100% to 115% increase in the interim pretax profits due to be unveiled soon.

In a profit cautionary to the Botswana Stock Exchange (BSE) this week, Sechaba directors said the expected percentage increase amounts to between P40 million and P60 million in absolute terms.

The announcement marks the second time in as many financial reporting periods that Sechaba has issued positive profit cautionaries to its investors.

For the year ended December 2018, Sechaba issued a cautionary saying pre-tax profits would be between P95 million and P108 million higher than that of the previous corresponding period. The holding company’s pretax profits actually came in P102 million higher for that period.

The turnaround in Sechaba has come from a review of the alcohol levy and liquor trading conditions by the President Mokgweetsi Masisi administration, measures which ended 10 years of downward profits for the investment

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company.

KBL is Sechaba’s sole investment and the holding company’s results are directly linked to the beverage manufacturer’s own performance. Global beverage giant, Anheuser-Busch InBev holds 40% in KBL and a separate direct stake of 16.84% in Sechaba.

Each year since the introduction of the alcohol levy in 2008 and subsequent liquor trading restrictions, Sechaba had issued profit cautionaries to investors warning of falling profits.

Its first positive profit cautionary was for the December 2018 results.

The new found buoyancy in Sechaba has rubbed off on its investors, with the counter earning a place amongst the handful of gainers on the BSE this year. Since January, Sechaba has put on 2.8 percent in value in a year in which the BSE’s Domestic Companies Index has shed 5.33%.



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