Bralirwa reports increase in profit margin despite sales volume decline

In 2023, Bralirwa, the leading brewery company in Rwanda, demonstrated resilience amidst challenging economic conditions, as reflected in their financial report released today.

With a 16.1% increase in net profit margin, Bralirwa showcased its ability to maximize profits despite facing headwinds. This marked a significant 1.8 percentage point rise from the previous year, illustrating the company’s adaptability and strategic initiatives.

Although Bralirwa experienced a slight decline of 1% in sales volume, revenue surged by 16.5% in the same period. This dip in sales volume was attributed to a slowdown in consumer demand triggered by inflationary pressures, both locally and globally.

The company faced increased costs of sales, up by 15.9%, primarily due to elevated expenses in raw materials and packaging. Moreover, net finance costs rose by a staggering 85.6%, primarily influenced by foreign exchange fluctuations, impacting operations due to Rwandan franc depreciation against major currencies.

Despite these challenges, Bralirwa’s net profit soared by an impressive 30.9% to Rwf29.5 billion. Etienne Saada, the Managing Director, attributed this growth to strategic revenue management, cost-saving initiatives, and operational efficiencies.

Looking forward to 2024, Bralirwa remains cautious about macroeconomic uncertainties but is optimistic about turning around its volume growth trajectory. The recent inauguration of a new production line and a substantial investment in capacity expansion and value generation reflect the company’s commitment to sustainable growth.

Additionally, Bralirwa plans to propose a cash dividend of Rwf28.69 per share at the Annual General Meeting of Shareholders in June 2024. This dividend, representing 100% of the net profit for fiscal year 2023, underscores the company’s commitment to delivering value to its shareholders.

Despite economic challenges, Bralirwa’s stock on the Rwanda Stock Exchange has shown resilience, currently trading at Rwf174 per share, reflecting a 1.2% increase year-to-date.

In summary, Bralirwa’s financial performance in 2023 showcases its ability to navigate through turbulent times while maintaining profitability and investor confidence.