- Share price and market capitalisation deteriorate further
- KBL employees on furlough since Monday this week
Things are not getting better for Kgalagadi Brewers Limited’s (KBL) parent company, Sechaba Brewery Holdings, as the giant brewer’s share price and market capitalisation continues to deteriorate on the BSE.
KBLs share price closed the week of Thursday 5 August 2021 at P16.25 per share, recording a 0.3 percent from its previous closing price of P16.30.
Sechaba began the year with a share price of P20.65 but has since lost 21.3 percent off that price valuation, ranking it 34th on the BSE in terms of year-to-date performance.
Sechaba’s share price was P22.01 in October 2019, but as things stand, the company seems headed back to its struggling days of 2017/18, thanks to the current ban on alcohol that was effected of 28 June 2021.
Sechaba’s market capitalization, on the other hand, currently stands at P1.8 billion compared to P2.44 billion in May 2020, which is a drop of over P600 million. The decline is likely to be due to the ban on alcohol that has been on and off since the advent of COVID-19 in Botswana early last year.
Market capitalisation is the total value of a company’s shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares.
Meanwhile, KBL has announced it would suspend operations from Monday this week (August 9). According to the announcement, due to the nature of the product, KBL stopped production at its Chibuku plants in Francistown and Gaborone immediately after imposition of the ban on alcohol. “However, we continued production of clear beer brands with the intention of building stocks in anticipation that the ban would be lifted sooner rather than later,” the company said.
“We are now on the 39th day of the alcohol ban and without line of sight of when the ban will be lifted, we cannot continue to produce indefinitely. Therefore, from 9th August, employees will be asked to remain at home until further notice, and a minimal number of critical operations will continue at select Gaborone sites only.”
The company added that the extent of the impact of the suspension on employees would be considered in consultation with all relevant parties. “The company had previously aligned with suppliers the decision to suspend, until further notice, payments due from 5th August 2021,” it noted.
“KBL is painfully aware of the impact this will have on our employee and the overall supply chain whose livelihoods depend on the beer industry and requests their understanding.”