Bralirwa stock gets lift from capacity expansion plan

Rwandan beer and soft drinks maker Bralirwa’s stock has maintained its upward trend, riding on growing demand to touch a new high of Sh86 (Rwf620).

The stock has been on a three-month rally attributed to an improved half-year performance and announcement of plans to increase production.
“On Bralirwa counter, there were outstanding bids of 503,300 shares between Sh84.70 (Rwf 610) and Sh86 (Rwf 621) and no outstanding offers,” said the Rwanda Stock Exchange (RSE) in its weekly report.

A total of 525,500 Bralirwa shares were traded last week.

(Read: Bralirwa stock hits record as investors buy growth plans)
The beer maker was the first company to list on the Rwandan stock market two years ago after it offered a quarter of the firm’s shares to the public through a regional Initial Public Offering (IPO) priced at Sh18.90 (Rwf136) a piece. The offer attracted high interest including from Kenyan investors leading to an over-subscription of 174 per cent. The brewer reported a 45.3 per cent growth in net profit to Sh1.1 billion (Rwf 7.9 billion) for the six months to June that the management attributed to increased turnover.

Bralirwa’s expansion plans are to be financed from internally generated cashflows, a strategy that advised the management’s decision to hold back interim dividend payment to shareholders.

The management also stated that it will be seeking a local bank debt to top up its finances.

The company has launched a Sh3.43 billion expansion plan to increase its capacity as it seeks to meet rising consumer demand.

Bralirwa plans to put up a new soft drink line at its Kicukiro plant and upgrade its main brewery located in Gisenyi, in the western province of Rwanda.

“These investments will be financed from internally generated cashflows as well as some limited local bank debt,” said Jonathan Hall, the company’s managing director in a letter to the RSE.

Its Kenyan-based competitor, East African Breweries Limited, has also announced a Sh4.2 billion expansion plan.

The brewer’s share, which is listed on the Nairobi Securities Exchange, has also been on the rise touching an all-time high of Sh260 last week.
Bralirwa is the maker and/or distributor of popular beer brands Primus, Mutzig and Heineken in the Rwandan market as well as Coca Cola soft drink.
There are three other firms listed in the Rwandan market; Bank of Kigali and Kenyan firms- KCB and NMG.