By Koviao Matuzee
Namibia Breweries Limited (NBL) said its Namibian business has remained resilient despite a sharp decline in South African export volumes, with gains across its broader product portfolio helping cushion the financial impact of the end of its minimum supply arrangement with HEINEKEN Beverages South Africa.
Presenting the company’s half-year results for the six months ended June 2026, NBL said the period was defined by two contrasting developments, a 38.2 percent decline in beer exports to South Africa following the end of the guaranteed minimum supply arrangement in April, and continued resilience in the domestic market despite mounting pressure on household spending.
The export decline contributed to a 3.9 percent fall in net revenue to N$2.02 billion, while operating profit dropped 21 percent to N$222 million from N$279 million in the corresponding period.
Headline earnings per share declined 24.3 percent to 74 cents, compared with 97.8 cents previously.
NBL managing director Waldemar von Lieres said the first half of the year had tested the business; however, it also demonstrated the strength of the company’s operations.
“The first half of 2026 was a period of real change. It has tested our resilience, but it has also shown the strength of the business that we have built, and the importance of preparing for the future,” von Lieres said.
He said the company had anticipated the end of the minimum supply arrangement and had been preparing for the resulting reduction in export volumes.
“In April, our export supply agreement with HEINEKEN Beverages South Africa moved from a guaranteed minimum volume to a flexible forecast model. This was planned, and we communicated this to the market at the time, and we have prepared for it,” he said.
Despite the export setback, NBL said its domestic business continued to gain total portfolio market share.
Namibian beer volumes declined by about three percent, but this was partly offset by strong growth in other categories.
Cider volumes increased by 15 percent, supported by Bernini, while the non-alcoholic portfolio continued to grow strongly, led by Windhoek Non-Alcoholic Lemon.
The company’s new Red Bull distribution agreement also contributed positively to volume and revenue, while spirits remained broadly flat and wine volumes declined.
Von Lieres said the broader portfolio had become increasingly important as Namibian consumers faced affordability pressures.
“Affordability was already a concern last year, and fuel and diesel price increases in April and May put further strain on household budgets. Our broader portfolio has really helped.”
NBL said it had kept pricing broadly flat while continuing to invest in its brands, seeking to remain relevant and accessible to consumers during a difficult economic period.
The company is now focusing on making the business more productive and competitive at the lower export volumes it expects to operate with on a sustained basis.
Von Lieres said this formed part of the company’s alignment with HEINEKEN’s revised EverGreen 2030 strategy, which focuses on accelerating growth, stepping up productivity and building a future-fit business.
“We are working on making NBL more productive and competitive at the volume that we can plan around, while retaining the ability to pursue growth.”
Chief financial officer Willem Bierens de Haan said the lower export base had placed pressure on profitability because there was less volume over which to spread fixed costs.
Operating expenses nevertheless declined by one percent, although savings from lower production volumes were partly offset by increased investment in brands and marketing, higher employee-related costs and reorganization expenses associated with adjusting the business to structurally lower export volumes.
“Our approach was not to cut costs in a difficult half. We continued to protect the brands and business capabilities to drive sustainable growth,” de Haan said.
He added that the company expected cost normalization in the second half of the year to support improved margins.
Despite the decline in reported earnings, cash generated from operations increased 12 percent to N$482 million, compared with N$430.5 million in the prior period.
NBL invested N$156 million in capital expenditure during the first half, mainly in technology and returnable packaging materials.
Management said significant capital investments made during 2023 and 2024 had largely been completed, meaning further major capital expenditure is not expected in the near term.
The company also said its balance sheet remained sound and that it was comfortable with its current funding position.
NBL declared an interim dividend of 74.45 cents per share, representing a full payout for the period.
Looking ahead, management said the second half traditionally represents a stronger trading period, although it stopped short of providing detailed earnings guidance.
Management also expects to maintain a strong focus on productivity, cost control and innovation while seeking new opportunities to utilize its production capacity.
Von Lieres said NBL was exploring potential co-packing arrangements and other opportunities to make better use of its brewery and packaging facilities following the reduction in South African export volumes.
“We have a brilliant brewery and packaging plant standing here, and we want to utilize it,” he said.
Water security emerged as another concern, with management noting that low dam levels and broader water pressures in central Namibia could pose risks to businesses and communities.
NBL said it had reduced water usage by approximately 30 percent since 2024 and remained focused on improving water efficiency.
Management said the company currently had sufficient access to water to maintain its existing production levels, although significantly higher peak production could become more challenging if restrictions were introduced.
“We want to be part of the solution. But it is, unfortunately, a slow process,” von Lieres said, referring to broader efforts to address Namibia’s water security.
