Rwanda’s largest beer and soft drinks maker Bralirwa recorded a sharp decline in its half-year profit on account of high cost of financing its foreign debt due to the weakening of the Rwandan franc.

The Rwanda Stock Exchange-listed firm saw its net profit drop 83.8 per cent in the six months to June 2016 to Rwf3.6 billion ($4.6 million) from Rwf597 million ($748,709) posted a similar period a year earlier.

“The significant decline in profits is attributed mainly to higher interest expenses on loans and losses following the revaluation of foreign currency denominated liabilities due the devaluation of the Rwandan franc,” Jonathan Hall, Bralirwa’s managing director said on Friday.

The Rwandan franc has been depreciating against the US dollar for the last two years; and has so far shed 7 per cent since January. This has seen Bralirwa’s net financing cost rise by 343 per cent to Rwf4.9 billion from Rwf1.1 billion.

Mr Hall said the company completed investment in its Gisenyi brewery as well as launched a new production line for its soft drinks plant in Kigali which also led to an increase in depreciation costs.

The brewer –owned 75 per cent by Heineken, has in the recent years been in an expansion drive that was partly been financed by foreign debt.

“Following the expected completion of the investment programme in 2016, we intend to start reducing foreign currency-denominated debt from 2017 onwards,” Mr Hall said in a statement.

Net revenue, however, grew by 6.2 per cent to Rwf42.9 billion compared to Rwf40.5 billion for a similar period in 2015, buoyed by growth in soft drinks volumes.
The firm did not announce a dividend for the period.

The firm said it will focus on innovation, improving productivity and reducing foreign debt.