TBL revenue drops as CTI seeks state redress

FLORENCE MUGARULA

TANZANIA Breweries Limited Group of Companies (TBL), which is among the country’s largest taxpayers, yesterday announced poor business performance in the past six months ending September 30.

The announcement came as the Confederation of Tanzania Industries (CTI) requested the government to seriously study the situation behind poor production among manufacturing concerns in the country.

According to the company’s results that were announced yesterday, TBL has recorded revenue decline of 7 per cent over the previous year. The report shows that the company has experienced challenging market and economic conditions during the six months.

The CTI Director of Policy and Advocacy, Mr Hussein Kamote, told the ‘Daily News’ in Dar es Salaam that his office was aware that most of industries are recording low production across the country and hence the need for the government to study the situation.

He said some industries were planning to retrench workers and others are about to close businesses. Mr Kamote said CTI has already secured fund to conduct the study on the situation and that it is set to commence on December 1, 2016. “CTI is aware of the current situation with local industries.

It is not a good trend. We need to find a collective solution as soon as possible,” he said. According to Mr Kamote, the government must find out why local industries are not doing well so that it could be easily to attract more investors to invest in the sector.

“There is need for the government and all other stakeholders to ensure industries record good performance, this will help to convince other investors to allocate their capital in the country and establish more industries,” he noted.

Earlier, the TBL Managing Director, Mr Roberto Jarrin, announced that his company has registered a decline in revenue. He said in the past six months, consumers of TBL products failed to confidently use them due to various strict measures that have been imposed.

“Consumer confidence has been subdued and together with the impact of stricter enforcement of trading hours,” he said.

Mr Jarrin said that overall volumes were down by 8 pc for the half year, compared to the same period last year. Moreover, the company has faced another big challenge by experiencing consumer shift towards more affordable products.

The move resulted into an increase in pressure on the company’s margins as reflected in the gross profit and operating profit for the period, which ended 12 and 13 pc down respectively on the previous year. According to the report, total cash generated from the operations in the past months ended on September 30, this year amounted to 195bn/-.

Out of this, 54bn/- was allocated for paying corporate tax while 141bn/- was used to fund interests and capital expenditure. Moreover, TBL allocated 104bn/- for paying dividends to company’s shareholders.

However, Mr Jarrin said apart from all those challenges, which resulted into the fall in earnings, the company still focuses on the management of the working capital and has been able to increase the interim dividend to 350/- per share.

In January, this year, Mr Jarring said, the company was planning to double annual tax revenue payments from the current 400bn/- to 800bn/- within five years.

According to a business analyst, Mr Raphael Masumbuko, most of local companies that depended on local market alone are likely to suffer when the country’s economy seems to undergo certain changes.

Mr Masumbuko, who is also the Chief Executive Officer of Zan Securities Limited, added that when a new government comes to power, some investors tend to ‘buy time’ to be sure with the new system before floating cash for circulation.

“It is possible some investors are still studying the situation. They want to be sure if the new system fits with their business operations. Therefore, some industries, including TBL, are likely to be experiencing this situation,” he added.