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TANZANIA – Tanzania Breweries Ltd (TBL), a subsidiary of AB InBev, has successfully sold its entire 60 percent stake in the beer manufacturing subsidiary Darbrew Ltd.
These moves are part of a strategic turnaround plan for TBL’s struggling and dormant units.
The sale of Darbrew Ltd was approved by TBL’s board on August 7, 2019, due to the subsidiary’s non-performance. However, the transaction faced delays for undisclosed reasons and was only completed during the accounting period ending December 31, 2023.
Darbrew Ltd was sold to a core shareholder, the Dar es Salaam City Council (DCC), as TBL sought to improve its cash flow amid various domestic and global challenges.
TBL’s 2023 annual report highlighted the difficulties faced by the company, including a significant rise in production costs and overheads due to global supply chain disruptions caused by conflicts in the Middle East and Eastern Europe.
Additionally, the company dealt with local challenges such as increased excise duty on raw materials, exceptionally wet weather, and load shedding by the Tanzania Electric Supply Company Ltd (Tanesco).
“During the year, management executed the Board’s approved disposal of Darbrew Ltd made on August 7, 2019. The disposal involved offloading 60 percent of the Company’s investment in Darbrew Ltd to Dar es Salaam City Council (DCC), a core shareholder.
The sale was executed on May 2, 2024, where the Sale Agreement, Transfer of Share Deeds and other documentations including formal handovers to the DCC were completed,” the company stated.
In parallel, TBL has committed to upgrading the dormant Kibo Breweries facility, following a Tsh42.41 billion (US$15.83 million) investment. The company aims to complete the malting plant in 2024.
Despite Kibo Breweries remaining inactive throughout the year, management did not recognize any impairment allowance after conducting an impairment assessment of its investment.
“Kibo Breweries remained dormant throughout the year. Management continues to upgrade the production facility of the entity and it expects the malting plant to be completed in the year 2024,” TBL reported.
Additionally, TBL shareholders approved a dividend payout of TSH537 (US$0.20) per share, totaling TSH158.4 billion (US$58.7M) for the year ending December 31, 2023.
The company reported a resilient growth and profitability, with earnings reaching TSH224 billion (US$82.9M), a 4 percent increase over the previous year.
Looking ahead, TBL Chairman Leonard Mususa said, “We will continue putting our consumers and customers at the centre of what we do and continue executing our tried-and-tested commercial plan to accelerate the pace of business growth.”
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