Chamwe Kaira
Liquidity pressures are becoming clear in Namibia Breweries Limited’s (NBL) balance sheet, according to an analysis by Simonis Storm Securities. Bank overdrafts have risen to just over N$230 million. Meanwhile, net debt dropped to N$403 million from N$536 million a year earlier.
However, this apparent improvement hides a weaker capital structure. The net debt-to-equity ratio jumped to 64.01%, up from 34.6% the previous year, showing a decline in balance sheet strength.
Working capital also shows stress. Inventories increased by 4.7%, and trade and other payables grew by 22.5%. At the same time, trade and other receivables fell by 26%. Simonis Storm said this imbalance points to inefficiencies in managing capital and rising pressure on internal liquidity cycles.
Despite these challenges, NBL declared a total dividend of 157 cents per share. This payout amounts to nearly N$420 million and represents 96.2% of profit after tax. Simonis Storm noted the company’s clear commitment to shareholders but questioned whether such a high payout is sustainable amid ongoing restructuring, volatile earnings, and a fragile balance sheet.
The firm added, “Investors prioritise strong balance sheets, low leverage, disciplined operational execution, and predictable performance. Although the declared dividend reflects management’s efforts to sustain market confidence, the underlying signals, rising leverage, strained liquidity, and deteriorating working capital efficiency warrant a more critical interpretation.”
Simon Storm recognises the long-term potential of NBL’s expanded distribution network and Heineken’s platform strength. Yet, the near-term financial outlook remains fragile. The company must show it can restore profitability in its core Namibian market, manage its larger portfolio consistently, and rebuild balance sheet strength.
NBL’s brand value and market position remain solid. Still, current valuations seem high compared to the company’s operational results and financial status.
Simonis Storm maintains a sell recommendation, reflecting caution until clear signs of stability and financial discipline appear.
NBL is Namibia’s oldest and largest brewer. It is known for brands such as Tafel Lager, Windhoek Lager, and Windhoek Draught. After its acquisition by the Heineken Group, NBL offers 55 brands across the Namibian market.
