Cheers to Tanzania half-year profits up 28pc
Wednesday October 16 2019
Darbrew Ltd manufactures affordable drinks like Chibuku whose once-high popularity appears to have declined sharply, leading to TBL's decision to scale down production. SHUTTERSTOCK
Tanzania Breweries Ltd, one of Dar es Salaam Stock Exchange's recognised heavyweight domestic listings has declared a 28 per cent operational profit over the past year, despite a decline in revenue growth.
According to TBL's half-year financial report up to June 2019, revenues dropped by three per cent mainly due to a scale-down in the business volume of its Darbrew Ltd unit which manufactures traditional beers like Chibuku.
"Our beer volumes returned to growth in the first half of 2019, with good performance in our mainstream brands and affordable brands segment," said TBL managing director Philip Redman.
He attributed the operating profit to a rise in brewing productivity, lower prices for brewing and packaging raw materials, and more efficient logistics resulting in lower overhead costs.
"As a result, our operating margin was 24 percent, which is a rise of 5.9 per cent from the previous year," said Mr Redman.
The company declared a Tsh350 (15 US cents) per share dividend payout to its shareholders for the month of July 2019.
TBL's share price as at Monday, October 7 stood at Tsh10,900 ($4.7) with a Tsh3.2 trillion-plus ($1.4 billion) capitalisation.
TBL was in September 1998 the second company to be listed on the then still-nascent DSE, after pioneers Tanzania Oxygen Ltd (now TOL Gases Ltd). The brewer currently has just under 295 million listed shares.
Meanwhile, Tanga Cement Plc last week published a cautionary notice advising its shareholders that the company expects its operating profit for the first six months of 2019 to be "between 112 per cent and 122 per cent lower than that of the comparative period for 2018."
"Tanga Cement Plc also expects that its loss per share for the period ended June 30 will be between Tsh157 (6.8 US cents) and Tsh167 (7.2 US cents), which is between 461 per cent and 496 per cent lower than its loss per share for the six months ended June 30, 2018,” board chairman Lawrence Masha said in the notice posted on the company's DSE website.
He said a competitive domestic cement sales environment "persisted in the period under review," leading to lower net prices for cement.
"Tanga Cement Plc adopted a more proportionally responsive pricing strategy to sustain its market sales volumes, but margins and overall profitability remained under pressure," Mr Masha said, adding that a new global accounting standard had also impacted on performance, resulting in a 40 per cent rise in depreciation expense to Tsh3.7 billion ($1.6 million).