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Tanzania Breweries Limited Interim Results for the six months ended 30 September 2012

30 September 2012

  2012
Tshs´ m
2011
Tshs´ m
%
Change
Total Revenue 440,009 386,546 14
Gross Profit 216,028 188,855 14
Operating profit 122,926 109,599 12
Earnings per share 256 238 8

Company Profile

Tanzania Breweries Limited (TBL), a subsidiary of SABMiller. TBL manufactures sells and distributes clear beer, alcoholic fruit beverages and non-alcoholic beverages within Tanzania. TBL has controlling interest in Tanzania Distilleries Limited. TBL’s most popular clear beer brands include Safari Lager, Kilimanjaro Premium Lager, Ndovu Special Malt, Castle Lager and Castle Lite. Other prominent brands associated with the TBL group are Konyagi Gin, Amarula Cream and Redd’s Premium Cold. The TBL group is listed on the Dar es Salaam Stock Exchange, employs about 1,600 people and is represented throughout the country with four clear beer breweries, a distillery, a malting facility and 5 distribution depots.TBL as a major player in the beverage sector is committed to the export of its products to niche and neighboring markets under the East Africa common market trading arrangement.

Overview of SABMiller

SABMiller is one of the world’s largest brewers with brewing interest or distribution agreements in over 60 countries across 6 continents. The group brands include premium international brands such as Miller Genuine Draft, Peroni Nastro Azzurro, Grolsch and Pilsner Urquell, as well as an exceptional range of market leading local brands. SABMiller is listed on the London and Johannesburg stock exchanges.

Financial Review

The Tanzania Breweries Limited Group of Companies (TBL) has delivered a satisfactory set of results despite challenging market conditions for the six month period ended 30th September 2012.

Overall volumes for the half year declined compared to the same period prior year. The decline was largely driven by lower consumption following the 25% excise duty increase on beer which was passed onto the consumer in July 2012. The majority of our brands were negatively affected by this significant excise increase and resultant increased selling prices. Tanzania Distilleries Limited however continues to perform well with strong volume and earnings growth recorded during the year.

Sales revenue growth of 14% over last year was driven by improved product mix and inflationary price increases. However, as a result of the above-inflationary increase in excise rates and resultant decline in volumes, Excise and VAT revenues to the Government are likely to be lower than that planned for the year, which reflects the price elasticity impact on consumers.

Trading profit ended the period 12% ahead of prior year. The Tanzanian Shilling remained stable over the period, which benefitted the cost of imported production materials, while the rise in electricity and oil prices as well as unreliable power supply has adversely affected fuel and energy costs.

Total cash generated from operations amounted to Tsh 121 billion, of which Tsh 28 billion was utilised to pay corporate tax, while the remaining Tsh 93 billion went towards funding interest and capital expenditure and paying the final dividend which was declared at the end of financial year 31st March 2012.

The growth in earnings was achieved in a challenging environment and largely as a result of improved cost management and efficiencies. I would like to thank the Board, management and employees for their efforts and continued support, as well as our customers, consumers and all stakeholders for their loyalty.

R. M. Goetzsche
Managing Director

Group Profit & Loss Accounts for the six months ended 30 September 2012

  2012 2011 %
  Tsh M Tsh M Change
Revenue 440,009 386,546 14
Cost of sales (223,981) (197,691)  
Gross profit 216,028 188,855 14
Selling and distribution costs (64,499) (55,699)  
Administrative expenses (29,293) (25,454)  
Other income 690 1,897  
Operating profit 122,926 109,599 12
Finance costs (7,708) (2,457)  
Profit before income tax 115,218 107,142 8
Income tax expense (34,845) (32,443)  
Profit for the period 80,373 74,699 8
Attributable to :      
Equity holders of the parent 75,505 70,177  
Non-controlling interests 4,868 4,522  
  80,373 74,699 8
Total number of shares in issue 294,928,463 294,928,463  
Less: Treasury shares (5,898,596) -  
Weighted ave.number of shares in issue 289,029,867 294,928,463  
Basic earnings per share (Tsh) 261 238 9.7
Diluted earnings per share (Tsh) 256 238 7.6

Balance sheet as at 30 September

  2012 2011 %
  Tsh M Tsh M Change
ASSETS      
Non current assets      
Intangible assets 40,596 41,005  
Property plant and equipment 366,191 306,602  
Investments 88 88  
Other receivables - 16  
  406,875 347,711 17
Current assets      
Inventories 130,841 92,131  
Accounts receivable 83,577 24,843  
Bank and cash balances 90,734 108,134  
  305,152 225,108  
Total assets 712,027 572,819 24
EQUITY      
Share capital 29,493 29,493  
Share premium 45,346 45,346  
Other reserves (12,209) -  
Retained earnings 411,915 306,856  
  474,545 381,695  
Non-controlling interests 10,938 6,601  
Total equity 485,483 388,296 25
Non-current liabilities      
Borrowings 59,600 65,208  
Deferred income tax 34,262 29,371  
Provisions 448 180  
  94,310 94,759  
Current liabilities      
Trade and Other payables 112,465 70,738  
Income tax payable 11,506 8,777  
Borrowings 6,561 8,422  
Dividends payable 1,702 1,827  
  132,234 89,764 47
Total equity and liabilities 712,027 572,819 24

Group Cash Flow Statements for the six months ended 30 September 2012

  2012 2011 %
  Tsh M Tsh M Change
Cash generated from operating activities      
Operating profit 122,926 109,599 12
Adjusted for:      
Depreciation & amortisation 15,661 12,973  
Loss (Profit) on sale of property plant and equipment (52) 249  
Other non-cash items 1,465 1,715  
  140,000 124,536 12
       
Changes in working capital (18,842) (10,647)  
Cash generated from operations 121,158 113,889 6
       
Interest paid (7,802) (2,297)  
Taxation paid (28,340) (29,789)  
Net cash inflow from operating activities 85,016 81,803 4
Cash flows from investing activities      
Purchase of property plant and equipment (27,742) (25,107)  
Proceeds from disposals 1,288 12,830  
       
Net cash used in investing activities (26,454) (12,277)  
       
Cash flows from financing activities      
       
Dividends paid to group shareholders (33,942) -  
Dividends paid to minority shareholders (24,881) (3,680)  
(Decrease)/Increase in non-group indebtedness (5,171) 17  
(Decrease)/Increase in intergroup indebtedness   (4,039)  
       
Net cash used in financing activities (63,994) (7,702)  
       
Net increase/(decrease) in cash and cash equivalents (5,432) 61,824  
       
Cash and cash equivalents at 1 April 92,902 37,888  
       
Cash and cash equivalents at 30 September 87,470 99,712 -12

Group Statement of Changes In Equity for the period ending 30 September 2012

GROUP Share capital Share premium Other reserves Retained earnings Minority Interest Total
  Tsh. M Tsh. M Tsh. M Tsh. M Tsh. M Tsh. M
Balance at 1 April 2011 29,493 45,346 - 236,679 5,759 317,277
Net profit after tax - - - 70,177 4,522 74,699
Interim dividend - - - - (3,680) (3,680)
Balance at 30 September 2011 29,493 45,346 - 306,856 6,601 388,296
Balance at 1 April 2012 29,493 45,346 (12,209) 336,410 6,070 405,110
Net profit after tax - - - 75,505 4,868 80,373
Balance at 30 September 2012 29,493 45,346 (12,209) 411,915 10,938 485,483

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