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RWANDA: Bralirwa revenues grow

Inside the Bralirwa factory in Rwanda.

But profits decline over declining sales, high costs

By Susan Babijja

Bralirwa, the biggest brewing company in Rwanda registered annual revenue growth of 5.6% despite a decline in sale volumes, according to its financial performance figures announced recently.

According to the results, the firm’s revenue for the period ended December 31, 2016 grew to Rwf88.8 billion, from Rwf84.1 billion the previous year, while total sales volumes decline marginally by 1.4%.

Bralirwa’s manager say cost management interventions they made reduced the impact on results of the negative operating activities. As a result, the cost of operations declined by 7.0% from Rwf13.0 billion to Rwf12.1 billion.  The brewer’s total capital expenditures were recorded at Rwf14.9 billion last year. Still, the company profit for the year 2016 declined by 80.3% from Rwf7.1 billion to Rwf1.4 billion, resulting in an earnings per share of Rwf1.36.

According to Victor Madiela, the Managing Director Bralirwa, the company has not increased the price of its products for the last five years. The last price increase was for soft drinks in August 2016, and it was the first price rise for the soft drinks portfolio.

“Despite lower volumes, driven by both affordability issues and a competitive market, Bralirwa managed to deliver revenue growth. The soft drinks collection price increases sought to compensate for the rise in fixed costs from operations and effect of currency depreciation as well as raising the raw material and other costs,” he said.

Bralirwa anticipates further growth for its top line this year, but cost pressures and constrained consumer spending power will continue to challenge the bottom line, the firm said as it announced its 2016 financial statement.

“And the financial impact is again reflected in a higher depreciation cost, increased debt to finance these investments, and a higher debt to equity ratio,” it said.

According to the statement, Bralirwa has concluded its investment programme aimed at enhancing production capacity, replacing existing facilities, reducing the environmental impact, and improving quality and innovation capabilities.

The brewer said though the ongoing uncertainties in the world economy would continue to impact African economies, the local economy showed resilience and robust growth last year, a trend it said could continue through 2017 “so long as external shocks are limited and manageable”.

The Rwanda Stock Exchange listed firm noted that the investment enabled it to export soft drinks to the Democratic Republic of Congo (DRC) and expand its product offerings

This follows a five-year investment initiative by Bralirwa in both production sites, the brewery in Gisenyi and the soft drinks plant in Kigali that ended last year. The investment also resulted in an increased net financing cost, including both the higher interest cost and the currency translation impact, the firm added.

“We delivered revenue growth despite a challenging operating environment, with volumes in soft drinks particularly impacted by the price increase,” Madiela said.

In the statement, he added that Bralirwa continues to invest in the business for the future and this year completed a major investment programme in production capabilities ensuring that Bralirwa can grow efficiently, innovate quickly, and reduce the impact on the environment.

Meanwhile, the firm will propose a cash dividend payment of Rwf1.00 per share for 2016 to the May 24 annual general meeting of shareholders. This compares to Rwf5 per share dividend payment last year. The dividend represents 73.5 per cent of the 2016 net profit, and, if approved, will be paid on June 23, subject to a withholding tax. However, only those who will be in the register of shareholders by the close of business on May 17 will be paid.


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