The Directors submit their annual report together with the audited financial statements for the year ended 31 March 2014, which disclose the state of affairs of Tanzania Breweries Limited (the “Company”) and its subsidiaries, Tanzania Distilleries Limited, Darbrew Limited and Kibo Breweries Limited, (together the ‘’Group’’).
OPERATING AND FINANCIAL REVIEW
The beer industry in Tanzania and in East Africa in general is becoming more competitive with more choices becoming available for the consumers. The business environment in Tanzania remained challenging with interrupted electricity supply hampering production and general infrastructure shortcomings causing challenges in delivering our products. Despite these challenges, the Company still managed to record moderate volume growth during the year.
Performance for the year
The Group is pleased to report a solid set of results for the year despite inflationary cost increases, market liquidity pressures and lower consumer disposable income.
Revenue of TShs 979,651 million represents a growth of 10% on prior year and is attributable to volume growth as well as inflationary price increases, improved efficiencies and focused cost saving initiatives. These initiatives led to 15% growth in the trading profit compared to prior year and resulted in the increase in profit for the year to TShs 203,707 million from TShs 177,128 million in 2013.
A total of TShs 101.9 billion was invested in capital investment compared to TShs 102.2 billion in the prior year.
Despite increased operational cost pressures resulting from a combination of rising fuel, energy and raw materials prices, the group’s cash generated from operations was TShs 313 billion reflecting a 6% increase on prior year. Of this amount, TShs 86 billion was utilised to pay corporate income tax and the remaining amount funded capital expenditure, repayment of bank borrowings, interest expenses and dividends paid to shareholders.
The level of business and the year-end position is satisfactory. The Company will continue with its expansion and facility upgrade programme. The Directors consider that the future prospects of the Company and the Group are promising.
The Board of Directors approved payment of the first, second and third interim dividend for the year ended 31 March 2014 of TShs 450 per share amounting to TShs 132,718 million (2013: TShs 300 per share amounting to TShs 88,749 million). The Directors do not recommend the payment of a final dividend.