SEYCHELLES BREWERIES LIMITED

Transcription

1 SEYCHELLES BREWERIES LIMITED INTERIM FINANCIAL STATEMENTS FOR HALF YEAR ENDED 31 DECEMBER 2016

2 The Board of Directors of Seychelles Breweries Limited (SBL) is pleased to announce its half year results for the six months ended 31 st December Half year performance overview SBL delivered net revenue of R179.6 million (2016: R181.1 million), registered a decline of 0.8% compared to the same period last year. The performance of beer and carbonated soft drink (CSD) is slightly behind last year mainly due to continued issues of product availability, partly offset by good performance of spirits segment. Our focus continues to remain on locally manufactured products and in particular our cherished beer brands. The relaunch of Seybrew brand in August was a great success and we ve worked hard to not only improve the quality of the brand look and feel but also the liquid within every bottle. This is something we are proud of as well as our launch of Festive Beer limited edition during the festive season but we know we have more to do particularly in consistent availability of products across all islands. The spirits good performance is mainly attributed to closing availability gaps and simplifying the pricing structure. The decline in our ready-to-drink (RTD) performance is due to an issue sourcing key ingredients at an affordable price The revenue contribution from beer is deteriorated by 1 basis points while contribution from spirits registered a growth of 3 basis points. The contribution from CSD remained unchanged. Page 2

3 The profit before tax of R33.2 million (2016: R47.4 million) is 30% below the same period last year. However, the net earnings of R23.3m (2016: R4.7m) is 397% above compared to the same period last year. In last year the tax charge was significantly high mainly due to the recalculation of deferred tax liabilities. The increase in net earnings also reflects the benefits gained as a result listing on Trop-X. The decline in profit before tax is mainly attributable to increased cost of (a) raw material partly due to local currency devaluation loss of R3.6 million (F16: gain R5.7m) (b) repairs and maintenance due to equipment failures (c) energy during boiler commissioning & testing and (d) investment in marketing activities. Page 3

4 The company generated operating cash of R41.2 million (F16: 63.4m) in first six month of F17. The cash was applied to pay taxes and dividend, investment in capital expenditure and managing the working capital requirements of the business. The cash balance as at 31 st December 2016 is reduced to R24.5 million from R42.0 million as at 30 th June The investment in working capital increased mainly due to seasonality as November and December are the peak months for SBL business. Page 4

5 Full year performance outlook The performance in the second half is expected to improve versus the same period last year. However, the company is not seeing the full benefits of efficiency yet. Fixing the current issues relating to product availability, quality and production efficiency is expected to take some time. The consistent availability of product remains a challenge due to frequent equipment breakdowns. In a bid to make a significant intervention to fix this the company is planning to invest a further R300m in next 5 years in replacing ageing equipment and modernizing the production facilities We have now completed the installation of the new management team with recruitment of a new Supply Chain Director Mr. Martin Cecil, who joined SBL in January Martin brings with him a wealth of experience with a career spanning over 33 years working with Carlsberg, Molson Coors and Anadolu Efes. Before joining SBL Martin was Group Supply Chain Director for Anadolu Efes where he was responsible for the management of 15 breweries across many countries including Turkey, Russia and parts of Eastern Europe. Finally, a historical issue on import duty for raw materials has arisen and we are currently in discussion with the SRC to resolve. The outcome of this is unknown at present but it could potentially impact this year s financial performance. Page 5

6 The Board and the members of management are committed to getting SBL performance back on track. We have seen improvements and are working on making the company great again. Page 6

7 Condensed statement of financial position ASSETS As at 31 Dec As at 30 Jun Note Total non-current assets 238, ,781 Cash and cash equivalents 24,540 41,977 Current tax receivable 3 31,685 19,492 Other current assets 121, ,271 Total assets 416, ,521 EQUITY Share capital 63,000 63,000 Capital reserves 15,805 15,805 Retained earnings 212, ,668 Total equity 291, ,473 LIABILITIES Deferred tax liabilities 4 12,158 13,983 Post-employment provision 19,171 21,178 Total current liabilities 93, ,887 Total liabilities 125, ,048 Total equity and liabilities 416, ,521 Nicholas Cook Managing Director Mohammad Iqbal Finance Director 29 th March, 2017 Page 7

8 Condensed statement of comprehensive income 6 months ended 31 December Note Revenue 179, ,119 Cost of sales (104,757) (93,412) Gross Profit 74,866 87,707 Advertising and marketing costs (6,898) (5,213) Administrative expenses (31,283) (37,801) Other income/(expense) (3,498) 2,652 Operating profit 33,187 47,345 Interest income Profit before tax 33,226 47,374 Tax 2 (9,924) (42,686) Net earnings 23,302 4,688 Page 8

9 Statement of changes in equity Share Capital Retained Total capital reserves earnings equity At 1st July ,000 15, , ,073 Profit for year ended on 30 June ,200 12,200 Dividends - - (37,800) (37,800) At 30 June & 1 July ,000 15, , ,473 Profit for 6 months ended 31 Dec ,302 23,302 Dividends - - (6,300) (6,300) At 31 Dec ,000 15, , ,475 Page 9

10 Condensed statement of cash flow 6 months ended 31 December Cash generated from operating activities 41,189 63,436 Change in working capital (18,202) 26,940 Interest received Tax paid (23,942) 11,441 Net cash (absorbed)/generated from operating activities (916) 101,846 Acquisition of property, plant and equipment (10,221) (17,717) Dividends paid during the year (6,300) (25,200) Net (decrease)/increase in cash and cash equivalents (17,437) 58,929 Cash and cash equivalents at beginning of the period 41,977 54,073 Cash and cash equivalents at end of the period 24, ,002 Page 10

11 Notes to the financial statements 1. General information Seychelles Breweries Limited is incorporated as a limited liability company in Seychelles under the Companies Act 1972 and is domiciled in Seychelles. The address of its registered office and principal place of business is as follows: Seychelles Breweries Limited, O Brien House, PO Box 273, Le Rocher, Mahe, Seychelles. 2. Tax expenses The tax on the Company s profit before tax differs from the theoretical amount that would arise using the statutory tax rate as follows: 6 months ended 31 December Business tax 9,794 14,613 Corporate social responsibility tax for the current year Corporate social responsibility tax adjustment related to prior year 1, ,749 15,519 Deferred tax movement (1,825) 27,167 Total tax expenses for the period 9,924 42,686 Page 11

12 3. Current tax receivable The movement of the current tax receivable account is as follows: As at 31 Dec As at 30 Jun At the beginning of the period 19,492 44,860 Tax paid 23,942 11,597 Tax charged for the period (11,749) (36,965) At the end of the period 31,685 19, Deferred tax The movement of the deferred tax account is as follows: As at 31 Dec As at 30 Jun At the beginning of the period (13,983) 9,828 Movement (charged)/credited to profit and loss 1,825 (23,811) Deferred tax liabilities at the end of the period (12,158) (13,983) Page 12