Bralirwa’s profits drop

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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.


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