East African Breweries Limited (EABL) has today announced its half-year results for the year ended 31 December 2019. The brewer recorded a 9% increase in after-tax profit amounting to Ksh 10.6 Billion compared to a similar period last year. Profit after tax also grew at the same rate amounting to Ksh 7.2 Billion in the period under review.
Leveraging on increased investment and operational efficiencies across markets and segments to expand, despite increases in alcoholic beverage taxes, EABL grew its net sales by 8%, with beer and spirits growing by 6% and 11%,
respectively, in its largest market Kenya.
Mainstream spirits and Scotch whiskey sales increased by 17% and 23% respectively, with an outstanding performance of Black & White, while the iconic low priced beer senator Keg, registered an outstanding performance. However, the increase in excise duty negatively affected the bottled beer, despite successful brand campaigns.
“We are pleased with this performance. Although excise duty escalation on alcoholic beverages in Kenya’s last budget impacted bottled beer, a more stable operating environment provided an opportunity to continue our growth momentum during the period. We remain cautiously optimistic about our second half of the year, although unpredicted tax and regulatory changes and challenges in our operating environment continue to present potential risks on the horizon.
“We will continue to focus on the execution of our strategy across our businesses. We are confident there is ongoing potential for growth across our geographies and categories. At the premium end, people are trading up while at the price-sensitive end, we believe we can recruit more illicit alcohol consumption by offering safe, quality options,” said EABL Group Managing Director and CEO, Andrew Cowan.
Among key contributors to growing profits were several innovation initiatives during the half-year, which included new brands contributing 28% of the net sales. Its Board of Directors has recommended an interim dividend of Kshs 3 per share for the half-year period a 20% increase from a previous Kshs 2.50.
EABL is committed to investing further during the financial year, to consolidate gains so far made in its production, commercial and sustainability capacities across the region.