The Management of Ghana Breweries Limited (GBL), the leading beer market shareholders, is upbeat that the company would make significant improvement in its performance this year, citing control over interest and reduced risk of exchange losses as main reasons for its optimism.

Management said there was a renewed confidence that the company would bounce back on the path of growth this year, after a successful implementation of the first phase of a strategic plan to revamp business processes for increased productivity and enhanced efficiency.

Mr Clement Nouwens, GBL's Financial Director, told journalists on Tuesday that the decision by the Executive Board of Heineken NV Company, the company's majority shareholder, to re-capitalise GBL's operations had removed the exchange risks inherent in the Euro-denominated debts and also reduced the interest burden caused by high local borrowings.

Heineken in December last year made an injection of five million Euros as deposit against the purchase of shares. It is further committed to converting 7.5 million inter-company debts, including 10.6 billion zero coupon convertible bonds, into equity.

Mr Nouwens, who was commenting on the company's preliminary results for 2002, presented to the Ghana Stock Exchange, said three million Euros out of the five million Euros cash injection, had already been applied to reduce the overdraft and medium-term loan position of the company.

"The balance will be used to finance part of the capital expenditures needed to upgrade the production facilities," he explained.

Operating profit for GBL last year rose from a loss of 3.3 billion cedis in 2001 to a profit of 6.4 billion cedis in 2002, representing a 4.7 per cent increase in turnover.

In spite of the significant improvements in the company's profit, the net result was negative as a result of massive exchange loss of 7.2 billion cedis in respect of Euro-denominated debts and the interest burden of 9.4 billion cedis.

"The 35 per cent depreciation of the cedi against the Euro during the year accounts for the exchange loss," Mr Nouwens explained.

Mr Nouwens said management would embark on a tight budgetary control to reduce cost, close leakage in the supply chain as well as introduce a staff bonus scheme as part of the company's strategy to reposition itself in the fierce competition in the beer market.