- Share price deteriorates
- Current ban on alcohol may worsen things
Sechaba Brewery Holdings Limited has lost P604 million in value in the space of a year, this publication has established.
According to the Botswana Stock Exchange (BSE) market updates, Sechaba’s market capitalization currently stands at P1.836 billion compared to P2.44 billion in May 2020, which is a drop of P604 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 capitalization 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.
Not only is Sechaba experiencing a decline in value but it is also facing a decline in share price. Currently at P16.60, the company’s share price started the year at P20.65 and was at P22.01 in October 2019.
Sechaba is also facing declining profits. For the year ended December 2020, its major subsidiary, KBL, recorded profit after tax of P239.5 million in 2020, a 21 percent (P26.9 million) drop from the P302.7 million registered at the end of 2019. Volumes sold declined by 29 percent in the period under review.
According to the Chairman of Sechaba Board, Bafana Molomo, the company was especially affected in the months of April and May when there was complete prohibition of the sale of alcohol across the country.
Sechaba’s major subsidiary, KBL, operates two traditional beer breweries in Gaborone and Francistown, a clear beer brewery in Gaborone, one sparkling soft drink production plant in Gaborone, and over seven sales and distribution depots around the country (Kanye, Lobatse, Gaborone, Palapye, Francistown, Selibe Phikwe and Maun).
KBL is involved in the manufacturing, import, distribution and marketing of a range of clear beers, alcoholic fruit beverages, soft drinks, purified water, opaque beer, as well as non-alcoholic beverages.
The company offers alcoholic fruit beverages, such as Redds, Vodka Lemon and Core Original. It also offers products under brands such as Carling Black Label, Castle Lite, St. Louis Lager and Chibuku.