Bralirwa, the country’s largest brewer recorded a decline of 82 percent in its profit before tax to Rwf 929million in the first half of 2016 down from Rwf 5,167 million in the same period under review in 2015.
The brewer who also recorded a poor performance on its counter at Rwanda stock exchange in the first half of this year attributes the drop to higher interest expenses as well as instability in the foreign exchange market.
“The significant decline is attributed mainly to higher interest expenses on loans and losses following revaluation of foreign currency denominated liabilities due to devaluation of the Rwanda franc,” said Jonathan Hall, Managing Director, Bralirwa on Friday.
Also, the investment by the company in line three of its Gisenyi brewery and PET line of the Kigali soft drinks plant which were commissioned recently resulted as Hall says, “in increased depreciation impacting our results from operating activities”.
According to the statement from the company, a subsidiary of Heinkenn international, net finance cost increased to rwf 4,892 million in the first half of 2016 up from Rwf 1,104 million in the same period in 2015.
The company also announced its earnings per share at (basic and Diluted) at 0.58 in the first half of 2016 from 3.58 in the first half of 2015 a drop of 83.8 percent.
Despite this, Bralirwa registered a growth in its volumes as well as revenues in the first half of 2016,with total sale volume growing by 3.5 percent with 2.2 percent in beer and 6.3 percent for soft drinks which was driven by the commissioning of the PET soft drinks.
“Our net revenue increased by 6.2 percent driven by favorable product mix innovations and growth in soft drinks volume,” Hall told Rwanda Eye.
Experts say the brewery sector which had to brave for volatility in the foreign exchange market as well as global uncertainties is expected to further go through tough times through the year.
Hall expects a top line growth in the remaining half of the year, “following the expected completion of the investment program in 2016, we intend to start reducing foreign exchange denominated debt from 2017 on wards” but he did not rule out cost pressure and constrained consumer spending power.