Bralirwa Ltd, Rwanda’s main producer and seller of beer and soft drinks, registered a 9.5% increase in 2015 revenues, the company’s financial statements have indicated.
The increase in revenues is attributed to the increase in sales and volumes, especially for the soft drinks.
According to Jonathan Hall, the Vice Chairman of the Board and Managing Director, total sales volume increased by 7.6%.
For example, sales for beer grew by 5.3% while soft drinks increased by 14% during 2015.
The performance reflects an affordability focus in a market where there is growing competition across sectors, Hall told The New Times.
However, despite strong sales, and revenue growth, margins have remained under pressure in 2015 resulting in lower levels of profitability.
Equally, earnings before interest and taxation (EBIT) declined by 49.2% to Rwf13.05 billion, while profit and total comprehensive income (Profit after Tax) for the year declined by 37.6%.
Over the past four years, Bralirwa has invested heavily in both the brewery located in Gisenyi, Rubavu District, and the soft drinks plant in Kicukiro, a Kigali suburb.
“From the outset of this programme, investments have been financed through a combination of internally generated cash and debt. The financial impact is reflected in these results in a higher depreciation charge, increased debt resulting in a higher debt to equity ratio and increased net financing costs that include interest and the cost of currency translation,” Hall noted.
Effects of currency depreciation
According to Hall, currency depreciation impacted on the company’s profitability in terms of raw material sourcing.
However, the company was able to settle the excise tax issue with Rwanda Revenue Authority (RRA) which was previously reported as a contingent liability, he added.
“The impact of the settlement has been taken into the 2015 Statement of Comprehensive Income with additional costs charged against 2015 results.
This negatively impacted revenue by Rwf2.5billion and increased interest expenses by Rwf1.6 billion.”
Outlook for 2016
The company anticipates a further top line growth in the current year, although cost pressures and constrained consumer spending power is expected to continue to be challenging to the bottom line.
Meanwhile, the company said the payment of a cash dividend for 2015 of Rwf5 per share (nominal value) will be proposed to the annual general meeting of shareholders.
The proposed dividend, if approved, will then be paid on 27thJune, 2015.
Overall, the dividend represents 72.4% of the net profit of the year 2015.