Rwanda’s Bralirwa registers 70.6% rise in profit despite revenue decline

RWANDA – Bralirwa Plc, Rwanda’s leading producer and marketer of beers and soft drinks has reported a 70.6% rise in profit the first half year of 2020 to Rwf3.9 billion (US$4m) from Rwf2.3 billion (US$2.4m) of the corresponding period in 2019, despite registering a decline in total volume sales and revenue.

The company’s revenue for the period under review decline 5.4% from Rwf47.136bn (US$49.35m) to Rwf44.609bn (US$46.71M) with total sales volume dropping by 3.4% to 850 million hectolitres.

However, the brewer reported growth in beer sales by 3.8 per cent to 674,767 hectolitres from 650,202 hectolitres in the same period last year.

On the other hand, sales volumes of soft drinks dropped by 23.6 per cent to 229,822 hectolitres.

According to the firm, with volumes and revenues lines of some product lines contracting, the profit gains were a result of strict cost management measures, the firm said.

Bralirwa trimmed its total operating costs by about Rwf2 billion (US$2m) to Rwf6.3 billion (US$6.6m) in the first half of 2020.

“Due to a challenging COVID-19 situation, we were not able to deliver top line growth in the first half of the year. Both volume and revenue decreased respectively mainly driven by the impact of COVID-19 pandemic.

“The good performance HY 2020 is driven by better bottom line management,” stated Merid Demissie, Vice Chairman of the Board and Managing Director of Bralirwa.

Among the aspects that drove down the operating cost was decreased sales costs by 6.3%, lower selling and distribution by 25.7% as well as lower administrative expenses by 15.6%.

This was as a result of reduced overhead expenses, lower level of activities due to Covid-19 mitigating actions and discontinuation of imported Heineken.

The pandemic also saw the firm go slow on capital investments in the first half of the year.

“Total capital expenditures in the first half year of 2020 remained relatively low due to Covid-19 mitigating actions. More capital expenditures expected in the second half of the year,” the brewer said.

In its outlook for the rest of the year, the brewer said that they expect to see a decrease in volume of sales compared to last year but plan to mitigate through optimization of route to market and incentivizing distributors.

In 2019, Bralirwa registered a 83.5% drop in profits to Rwf1.2bn (US$1.25m).

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It’s sales volume for the year went up by 5.4 per cent to 1,886 000 hectoliters so did the revenue by 1.8 per cent to Rwf100.6bn (US$104.9m).

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