Despite unfavorable economic conditions, the Rwandan brewer Bralirwa almost quadrupled its net profit in 2017.
Unveiled Monday, the company’s 2017 annual accounts show a profit after tax of 5 billion Rwandan francs (7 million dollars), against 1.4 billion francs (1.8 million dollars) in 2016, an increase of 263.3% from one year to the next. Welcoming this performance, Victor Madelia, the company’s General Manager, nevertheless reminded us that “these results were achieved despite a difficult business environment”. Quoted on Wednesday by the New Times, the leader explains that “the monetary depreciation (of the Rwandan franc, Ed) has resulted in an increase in operating costs, which have themselves been offset by an increase in the price of beer and sodas; the first for six years. An increase in prices which ultimately resulted in a contraction in volumes sold (-12.4%). Logically, the turnover followed this downward trend: at 88.8 billion Rwandan francs against 86.4 billion in 2016, it is down 2.8% over 12 months.
Beyond the short-term operational environment, however, it is first and foremost the significant improvement in debt financing conditions that made the difference in terms of the final result. Bralirwa’s press release states that “the firm has successfully renegotiated all of its credit facilities with its lenders, which has significantly reduced the associated financial costs.” As a result, operating profit rose 21.3%, from 12.1 billion to 14.7 billion Rwandan francs. As for the outlook for 2018, while cautioning against “a likely backdrop still”, the brewer said the focus would be on “reducing debt and costs”. Good news for investors as the value, listed on the Kigali Stock Exchange, is at its highest ever.
