Bralirwa, the largest brewery company in Rwanda, recorded a 16.1 per cent in net profit margin in 2023, a 1.8 percentage point increase from the prior year.

The metric indicates how much profit the brewery generated from each franc of sales in 2023.

Despite an increase of 16.5 per cent in its revenue growth, the brewery’s sales volume declined slightly by 1 per cent in 2023 compared to the year before.

The Rwanda Stock Exchange-listed company attributed the decline in sales volume to a slowdown in consumer demand caused by inflationary pressures.

Global inflationary pressures and high commodity prices also weighed heavily on the brewery’s cost of sales in the year under review.

Cost of sales, which is the direct expense the company incurred to produce its various products, increased by 15.9 per cent in 2023 due to higher cost of inputs, mainly raw and packaging materials.

Net finance costs - how much Bralirwa spent to run its operations - increased significantly by 85.6 per cent mainly driven by foreign exchange cost following the Rwandan franc depreciation against the euro and dollar.

The Rwandan franc depreciated 18 per cent against the American dollar in 2023, affecting major business operations in the country.

Selling and distribution costs were also 7.9 per cent higher in the same period driven by higher cost of transportation to distributors due to tariffs increase.

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Profitability

Despite these headwinds, Bralirwa’s net profit grew by 30.9 per cent to Rwf29.5 billion in 2023.

"Our focus on revenue management, cost-saving initiatives, and operational efficiencies significantly enhanced our operating results despite high input and energy cost inflation," Etienne Saada, Bralirwa's Managing Director, said in a press statement.

The company said it was cautious about the macroeconomic and geopolitical outlook in 2024, saying its focus will be on turning around its volume growth.

This, they believe, will be possible thanks to the increased investment in creating additional beer capacity and value generation.

Last month, Bralirwa inaugurated a new production line at its brewery as part of its 30-million-euro expansion plan.

Meanwhile, the company plans to propose a cash dividend of Rwf28.69 per share to the Annual General Meeting of Shareholders which will be on June 28, 2024.

If approved, the proposed dividend will be paid on August 30, 2024.

According to the firm, the dividend is equal to 100 per cent of the net profit for the fiscal year 2203, and it is subject to withholding tax.

Bralirwa stock on the Rwanda Stock Exchange is currently trading at Rwf174 per share, 1.2 per cent increase year-to-date.

ALSO READ: Bralirwa inaugurates state-of-the-art production line