Rwandan-listed brewer Bralirwa has once again recorded depressed profit margins, blamed on the slump in beer and soft drinks consumption, increased competition, high input and debt costs.

According to the firm’s latest results, in 2016, its revenues declined by 7 per cent, from Rwf13 billion ($15.7 million) to Rwf12.1 billion ($14.6 million).

The company’s profit and total comprehensive income for 2016 declined by 80.3 per cent, from Rwf7.1 billion ($ 8.5 billion) to Rwf1.4 billion ($1.7 million).

Mid April, the share price of Bralirwa fell to Rwf140 ($0.16), bringing down the Rwanda Stock Exchange’s benchmark index. This is a drop of 214.2 per cent from Rwf440 ($0.53) in May 2014.

The brewer has therefore cut its dividend payout from Rwf5 ($0.006) in 2015 to Rwf1 per share ($0.001). The proposed dividend, if approved, will be paid on June 23. The dividend represents 73.5 per cent of the net profit of 2016.
“We delivered revenue growth despite a challenging operating environment, with volumes in soft drinks particularly impacted by the price increase,” said Victor Madiela, the vice chairman of the board and managing director of Bralirwa.

Beer imports from Uganda, Tanzania, Burundi and Skol Breweries, a local beer company, have eaten into Bralirwa’s market. The soft drinks market is also threatened by the growing number of players in the country.

While the company reported 5.6 per cent organic revenue growth, from Rwf84.1 billion ($101.8 million) in 2015 to Rwf88.8 billion ($107.5 million) in 2016, consumption went down 1.4 per cent as consumer spending on beer dropped.

Bralirwa increased the prices of soft drinks by Rwf50 ($0.06) last August.