The Sierra Leone Brewery Limited yesterday held its Annual General Meeting at the Atlantic Hall, the National Stadium in Freetown, to report to its shareholders and give the company’s 2006 report.
The chairman of the Board, J N Ferrand in his statement, thanked all those who helped the company over the years to continue to exist.
Mr Ferrand said operationally 2006 was a very rough year for them. “Despite recording an increased turnover of Le30.7billion in 2006 which is and increase of 16% compared to Le26.5billion in 2005, a modest profit before interest charges and tax of Le0.84billion in 2006 compared to a loss of Le0.74billion in 2005, I regret to report that the company recorded a higher net loss after tax of Le6.3billion in 2006 as against a net loss after tax of Le3.7billion in 2005”, the chairman said.
The chairman’s report stated that these results were taking into account the net financing costs from exchange rate difference, interest on overdraft, long term loan and inter company balances.
“This is the true manifestation of the very harsh and difficult operational and macroeconomic situation of 2006,” he disclosed.
Mr Ferrand’s report stressed that due to the operational environment and the resulting negative effects on the operations, they were forced to carry out a strategic reorganization and restructuring of the operations.
“The exercise led to the shedding of well over 44% of our work force that was primarily aimed at repositioning the company to meet the future challenges imposed by our harsh operating environment,” he noted.
The chairman said with this exercise behind them now, they were convinced that the company was now well positioned to be more efficient and flexible to fully meet the challenges of their changing environment and realise their mission of being “the most preferred, low cost, high quality beverage supplier in Sierra Leone in a corporate socially responsible manner”.
Mr Ferrand said the double digit interest rates between 23 – 25% charged by local banks continue to increase the cost of capital and that of doing business in the country,
He said they were “however happy to note that the foreign exchange rates against the Euro and Dollar have remained relatively stable with less than 1% increase for most part of 2006”.
Another area that remains a major challenge for businesses in the country is the high and loop sided tax policy of the country, he highlighted.
Mr Ferrand said they were eagerly awaiting the introduction of the proposed “goods and services tax” (GST) which would allow local manufacturers to compete on an equal basis with importers.
The chairman’s statement appealed to government to eliminate the administrative barriers, corruption, over dependence on donor funding which were now receiving great attention.
Following the World Bank/FIAS administrative barriers study, new Acts of parliament were recently enacted primarily to remove the most challenging of the administrative barriers to doing business in the country.
He said they hoped the government would continue to implement all the recommendations resulting from the study.
The chairman said they would therefore continue to crave the indulgence of all and seek the support of all in helping us turn this business around.