RG Brands JSC reports Q1 2025 results

RG Brands JSC, a leading Kazakhstani producer of non-alcoholic beverages, has published its interim consolidated financial statements for the period from January 1 to March 31, 2025 (Q1 2025), prepared in accordance with International Financial Reporting Standards (IAS 34). The Group continues to demonstrate stable operational performance during a transitional period marked by a focus on implementing its proprietary «7 Stars» strategy. RG Brands maintains sales growth and expands its geographical reach, strengthening its positions in key export markets. Despite macroeconomic volatility, the Group succeeded in maintaining revenue stability, improving operational metrics, and reaffirming its long-term strategic investment direction.

The launch of the proprietary «7 Stars» strategy requires a fundamental transformation of the business, and RG Brands JSC is now entering a long-term investment cycle. The «7 Stars» strategy focuses on building 7 brands that are set to become market leaders in Central Asia by 2050.

Key Financial Highlights:

• The Group’s consolidated revenue increased by 11% year-over-year, reaching KZT 39.8 billion (Q1 2024: KZT 35.8 billion). The primary growth drivers were increased sales of juices, non-alcoholic beverages, and the food product line.
• Selling expenses totaled KZT 9.36 billion, up 7.9%, primarily due to increased marketing and distribution costs.
• General and administrative expenses rose by KZT 1.1 billion to KZT 3.32 billion, reflecting growth in the wage fund and other operational costs amid the ongoing business transformation.

Improved efficiency amid investment challenges

The Group demonstrated a significant improvement in gross and operating profitability: gross profit increased by KZT 3.2 billion, and operating profit grew by KZT 1.4 billion. This was achieved through effective cost control and optimization of commercial expenses.

However, net profit was impacted by the following factors:

• Increase in interest expenses (from KZT 1.3 billion to KZT 6.5 billion — a fivefold rise). As part of the 7Stars strategy implementation, the company attracted financing to support growth, including capital expenditures (CAPEX) and working capital needs. Despite the high base interest rate in tenge, effective debt portfolio management helped maintain the cost of external bank financing at the previous year’s level. The increase in total financing costs was due to the growth of intra-group financing using previously accumulated internal resources, which does not affect the Group’s overall expenditure and was necessary to support dynamic sales growth in Uzbekistan.
• Negative foreign exchange difference (–KZT 2.4 billion). The currency revaluation was caused by the strengthening of the tenge against foreign currencies (USD, EUR). Since the Company’s foreign currency assets exceed its foreign currency liabilities, this revaluation is temporary and unrealized, having no impact on cash flows.

Investments and Asset Structure

In Q1, RG Brands invested over KZT 732 million in the renewal of fixed assets and intangible assets. The high level of inventories was maintained (+34%), reflecting strategic procurement of raw materials amid external market instability.

The total volume of assets amounted to KZT 137.8 billion, of which:

33% — long-lived assets,
67% — current assets.

Capital and Liabilities

• The company’s equity amounted to KZT 22.7 billion.
• Total debt burden: KZT 67.8 billion (including long-term and short-term loans, and bonds).
• The book value per share decreased from KZT 7,255 to KZT 6,536.

Focus on Transformation and Growth

RG Brands JSC continues to implement its strategy of independent growth, product portfolio diversification, and strengthening of its proprietary brands in Kazakhstan and Central Asia. Despite pressure from rising financial expenses, the Group remains committed to sustainable development, cost control, and investments in marketing and logistics.

Mutallip Zurdinov, a member of the Management Board of RG Brands JSC, stated:
«We are moving forward with confidence under the new 7 Stars strategy, despite the challenges of the transition period. The first quarter of 2025 marked a phase of strengthening our business foundation, including through investments in logistics, marketing, and operational processes. We are now focused on brand development, building regional leadership, and creating long-term value for our shareholders.»

Contribution to the Economy: Employment, Taxes, and Social Responsibility

RG Brands JSC is not only a business with export ambitions, but also a systemically important taxpayer and employer in Kazakhstan. The Group ensures stable employment, invests in infrastructure development, and supports local communities.

As of the first quarter of 2025, the company contributed the following to the state budget:

• KZT 887.7 million — in current corporate income tax
• KZT 192 million — in other taxes, including property and environmental taxes
• KZT 241.6 million — in personal income tax
• Additionally, 10% of the wage fund was allocated to mandatory pension contributions

The total amount of tax payments and related obligations for the quarter exceeds KZT 1.3 billion, not including indirect taxes and taxes paid by suppliers and contractors along the value chain.

At the same time, salaries and related tax and social security obligations amounted to more than KZT 2.56 billion in the first quarter.

Geography and business

• The company’s headquarters is located in Almaty. Production facilities are located in Almaty, the Almaty region, and Kostanay.
• The Group is present in Kyrgyzstan, Uzbekistan, and the Russian Federation for sales and distribution.
• Distribution agreements with PepsiCo and Lipton remain in effect in Kyrgyzstan until the end of 2025.

Development Plan

• Continued investments in equipment upgrades and new technologies
• Expansion of distribution in the CIS and Eurasian Economic Union markets
• Strengthening environmental and social initiatives as part of the corporate social responsibility strategy

Conclusion: Investing in Resilience

RG Brands demonstrates a mature strategic approach: the company has chosen to expand its operational capacity, invest, and maintain logistical stability despite the impact of currency fluctuations and debt financing. These steps lay the foundation for growth in the coming quarters.

RG Brands JSC reaffirms its commitment to the development of Kazakhstan’s economy and national entrepreneurship, continuing to strengthen its presence both regionally and internationally.

About the Company

RG Brands JSC is one of the leading producers of non-alcoholic beverages, juices, tea, milk, and food products in Central Asia. The company is developing a portfolio of national brands, including DaDa, Asu, Nektar Solnechnyi, Gracio, and Piala, while also investing in sustainable development and the export potential of the region.