Zambia Breweries profits up 55%, as company targets $80 million expansion project

Zambia Breweries PLC has posted an increase of 55 percent in the operating profit to K294 million in 2022 compared to the previous year.

The company’s net revenue grew by 19.7 percent compared with the previous year, driven by both price and mix, with a healthy increase in margins.

This is according to the financial results for the year ended December 31,2022 posted on the Lusaka Securities Exchange (LuSE).

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In an order of the Board, Company Secretary Deborah Bwalya said despite some supply challenges, beer volumes in 2022 grew by high single digits compared with 2021.

“Higher margin imports, particularly cans, gave net revenue a further boost, although the core local brands continued to see strong demand and thus dominated the sales mix. We also saw strong growth from our brands in the Flavoured Alcoholic Beverage category,” Bwalya said.

She indicated that the overage prices of electricity and fuel, coupled with fuel price volatility, impacted direct costs, with the reinstatement of Value Added Tax (VAT) on petroleum products making it harder to plan for logistics costs.

“Overall, variable production and marketing costs remained in line with revenue increases,” Bwalya said.

She said in the year under review, Zambia Breweries paid K1,162 million in excise tax to the government, up 15 percent compared with 2021 due to overall volume and price growth as well as the increase in premium and core brand sales.

“We have again seen the resilience of our product offering, demonstrated by strong consumer demand throughout the year.

She said they are positive that the strong portfolio of brands and packs will continue to meet its diverse consumer needs.

“I am pleased to say that we are now going ahead with the milestone US$80 million capital expenditure strategy that will help meet market demand through the doubling of capacity at our Lusaka plant,” Bwalya said.

The expansion is expected to be complete by the end of 2023.

She said this plant will also enable Zambia Breweries to make cassava-based products in Lusaka that are currently only produced in Ndola.

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