TANZANIA – Tanzania Breweries Limited (TBL) net profit has declined further in the six months ending September, this year, despite increase in sales and production.
TBL said in financial statement that its net profit has declined by three per cent to 89.25bn/- in six months period that ended in September compared to 92.32bn/- of the corresponding period 2016.
TBL Group’s Managing Director, Mr Roberto Jarrin said however TBL has seen an improvement in volume and revenue performance despite tough trading conditions and a shift towards affordable beer products.
The profit before income tax has increased by 13 per cent from 132.32bn/- of 2016 to 149.75bn/- by September 30, this year. Volumes grew by 31 per cent on prior year mainly from affordable beer products.
Revenues have grown by 12 per cent driven by volume growth and product mix. Also operating profit increased by 5 per cent from 138bn/- in 2016 to 146bn/- in 2017 for the same period.
In addition to the product mix, the performance was affected by exceptional costs related to the combination from SABMiller to ABInBev. A total of 44bn/- was invested in capital investment compared to 39bn/- in the prior year.
Moreover, the fund generated by the group increased from 195bn/- of 2016 to 222bn/- in 2017 making an increase of 14 per cent to prior year.
According to the group, at least 29bn/- was utilised to pay corporate income tax and the remaining amount funded capital expenditure, repayment of bank borrowings, interest expenses and dividends paid to shareholders.
Last month, TBL Group announced changes in its operational model as a strategy to grow its market amid shifting sentiments.
Speaking at the Second Ministerial Dialogue with the Private Sector, Mr Jarrin said the company decided to tilt its model – by paying much attention on affordable brands so as to align itself to new economic realities.
“With the existing market conditions, the company had previously been growing at the rate of negative 0.3 per cent. We were therefore forced to re-think our operating model and realign it to the realities of the market,” he said during the dialogue.