Namibia Breweries Limited earnings expected to be lower by N$190 million in September
Namibian.com.na - Oct 3rd, 12:31
Namibia Breweries Limited (NBL) said earlier in September that it expects basic earnings per share to be materially lower than the prior year by between 66% and 68% in the year ended 30 June. The company said in a trading statement published by the Namibia Stock Exchange that the decline is attributed to the impairment of a deferred tax asset related to DHN Drinks.
“Given the information set out in the trading statement, we estimate the impairment to be in the range of N$190 million. This impairment, in our view, implies that the probability that DHN Drinks will turn profitable in the medium term is indeed slim,” IJG Securities said in a note on the announcement.
The company also indicated that it expects headline earnings per share (HEPS) to increase by between 18% and 20%, which is marginally above IJG’s forecast.
“Our forecast is for HEPS of 1, 244 cents per share, which implies growth of 15.7% on the 2013 financial year. Full results will be released on 19 September.
In the statement, NBL said, given the decision to impair the DHN deferred tax asset by its board, the board has reassessed the valuation of its investment in DHN Drinks and since the DHN restructuring negotiations are still in progress, the board has resolved to impair its investment by de-recognising the deferred tax asset included in DHN.
In March 2008, drinks groups Diageo, Heineken and Namibia Breweries said they had agreed to form a new joint venture in South Africa. The three firms said the venture is called DHN Drinks and is for their combined beer, cider and ready-to-drink (RTD) businesses in South Africa and is meant to build on their current cost sharing venture in the country.
British drinks group Diageo and Dutch brewer Heineken each own the majority of DHN Drinks and NBL owns a minority stake.
Each party’s share in the profits of DHN Drinks is proportion to their shareholding.
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