Tanzania Breweries reports 9% decline in half year revenue impacted by COVID-19

TANZANIA – Tanzania Breweries Limited (TBL), a subsidiary of AB InBev has announced a 9% decline in revenue in the half year period ended 30th June 2020 to Tshs 429.03 billion (US$185m), impacted by the global COVID-19 pandemic.

According to the group, its beer revenue and volumes were mostly affected during April and May, whilst spirits achieved double digit growth in the period.

In June when COVID-19 measures eased in the country, signs of recovery were observed with low single digit revenue declines.

Its operating profit decreased from Tsh. 114.334bn (US$49.3m) of the same period in the previous year to Tsh. 73.31bn (US$31.61m) reflecting a 36% decline contributed mostly by a decrease of beer revenues impacted by COVID-19.

Operational Overhead and Sales and Distribution(S&D) costs reduced in the first six months of 2020 while other central costs, exceptional items and recharges remained stable or increased. Operating margin ended up at 17.1% compared to prior year which ended at 24%.

The group’s generated cash from operations was TShs 73.258 billion (US$31.59m), of which TShs 42.986 billion (US$18.5m) was utilized to pay corporate income tax, TShs 10.885 billion (US$4.69m) to pay capital expenditure, TShs 5.352 billion (US$2.3m) used in financing activities and the remaining funds was retained for future activities.

To ascertain prudent financial discipline and liquidity during the pandemic, the company has indicated that a final dividend decision will be taken in the second part of 2020.

“I would like to thank the Board, Management and employees for their efforts and continued support as well as our customers, consumers and all stakeholders for their loyalty during this time of global pandemic.

We continue to work closely with a wide range of stakeholders to leverage our scale, capabilities and resources in the fight against the COVID-19 pandemic and to do our part in the economic recovery. Our people are rising to the challenge each day, demonstrating creativity, passion and strength to keep us moving forward,” said Philip Redman Managing Director TBL Plc

Tanzania Breweries’ operating profit decreased by 36% contributed mostly by a decrease of beer revenues impacted by COVID-19.

TBL Plc, sells and distributes clear beer, alcoholic fruit beverages and non-alcoholic beverages within Tanzania and exports its products to neighboring markets under the East Africa Common Market trading arrangement.

The company has a controlling interest in Tanzania Distilleries Limited, a spirituous liquor company that is situated in Dar es Salaam and Darbrew Limited an opaque beer company located in Dar es Salaam.

It also fully owns Kibo Breweries Limited, a Property management company domiciled in Moshi.

The brewer’s most popular clear beer brands include Safari Lager, Kilimanjaro Premium Lager, Ndovu Special Malt, Castle Lager and Castle Lite.

Other prominent brands associated with the TBL Group are Konyagi and Redds Premium Cold.

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Recently, the company partnered with the Farm to Market Alliance (FtMA) and the World Food Programme (WFP) to support smallholder sorghum farming in Tanzania.

The collaboration kicked off with a pilot project where TBL Plc has agreed to purchase the sorghum produced by approximately 1,400 smallholder sorghum farmers in Dodoma and Manyara.

TBL Plc, FtMA and WFP will support the farmers with access to sorghum seed; crop insurance; sorghum crop management protocols; agricultural extension services; and improved aggregation and market access to maximize their harvest.

The project will play a crucial role in raising production of sorghum in Tanzania, ensuring farmers get reliable source of income.

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