KWV Limited interim results

Friday, 12 March, 2004
Janine Eybers
It was to be expected that the results would be adversely effected by the relative strength of the rand

KWV Limited today released its interim results for the six months ended 31 December 2003. Despite a decline of almost 30% in adjusted headline earnings the group says that it is not discouraged by these results. Almost two thirds of the group's turnover is in foreign currency and it was to be expected that the results would be adversely effected by the relative strength of the rand during this review period compared to the six months ended 31 December 2002.

The total group turnover declined by 7,9% against the comparable period while the exchange rate in itself was responsible for a decline of approximately 8,5%. The gross profit declined by R60,5 million or 27,1%. The decline in operating profit was limited to R24,5 million lower due to continued strict cost control and improved efficiency. Export volumes of packaged liquor products grew by 2% after a deliberate major cutback on promotional activities in certain markets due to the stronger rand.

Income from the group's associate companies, Distell and Ceres Fruit Juices reflected a modest increase of 1,8% against the comparable six months of the previous year. The adjusted headline earnings declined from R72,0 million to R50,5 million. The latter is in line with the budgeted headline earnings for the period under review. The results for the remaining period of the financial year and thus also for the full year to June 2004 will to a large extent be influenced by the levels of the South African rand.

Should the rand maintain its current relative strength it can be expected that the full year results will maintain a similar negative trend to that seen for the first six months. According to the group its entry into the South African market with its wide range of KWV branded products will not have a meaningful influence on the results for the current financial year.

No interim dividends are paid by KWV Limited.

Contact: Albert Eksteen, Group Secretary
Tel: +27 (0) 21 807-3078