Sechaba board of directors has resolved to change the company’s financial year end from March 31st to 31st December, the company disclosed on Wednesday.
The company, which is a parent to Kgalagadi Breweries Limited (KBL) has advised stakeholders that the current financial year will end on the 31st of December 2016. The BSE listed company will publish its current financial year results in March 2017, added a statement. The board has not disclosed reasons for the change in reporting period. On another matter, Sechaba’s parent company, SABMiller has bought Belgium-based brewer, AB InBev in a marathon bid that took months to complete. AB InBev’s reporting period runs from January to December every year.
The change in reporting period comes weeks after Sechaba reported a drop in profits for the interim results to September 2016. Profits for the first six months of its financial year declined by over 40percent as the domestic regulations continue to bear heavily on its operations.
According to the company, profits plummeted by 40, 7 percent as volumes declined by 0, 1 percent. Through its subsidiary, KBL Sechaba produces clear and opaque beers for the domestic market. Directors made it clear that industry regulations have hit them hard and the company is trying all available avenues to spring back to life. “The decline in the financial performance of the company is mainly attributable to the current regulatory environment in which the company operates,” said the BSE-listed outfit.
The regulations in question are the Alcohol Levy which is currently at 55 percent.
The Levy affects clear beer sales. There are also the traditional beer regulations which have negatively impacted opaque beer which is popular among the low-income earners in townships and villages. For the period under review, clear beer volumes managed to grow marginally by 6 percent, suggesting consumers spent more time in bars and bottle stores between April and September this year. Meanwhile, fruit beverages, sparkling soft drinks and traditional beer volumes declined in the period under review.
Despite the massive fall in profits, the company shareholders will smile all the way to the bank. The board chaired by Thabo Matthews has declared a dividend of 30 thebe per share.