Nairobi, February 20, 2009- Beer maker East African Breweries has posted a five percent increase in net profit in the six months to December 31.
EABL Group managing Director Gerald Mahinda said the company recorded a Sh 4.053 billion profit in the first half of the year compared to Sh3.89 billion over the same period.
“Sales rose to 18 billion shillings from 16.1 billion shillings which represents a 12 percent increase compared to the same period last year,” Mr Mahinda said
He said Tusker, Guinness. Bell and Senator brands were the main drivers of the growth both in Kenya and Uganda.
Mr Mahinda pointed out that the business registered weaker growth compared to the same period in 2007 due to the economic slowdown that consequently led to the lower disposable income.
He said this coupled with an increase in excise tax on malt beer by 65 percent and 300 percent for local spirits between June and December last year had resulted to some consumers shifting to cheaper brands including illicit products.
“We however have very good relations with the government and so we are using these relations to discuss with the government on how to best address this issue,” Mr Mahinda stressed.
Production costs increased by 23 percent due to the effects of raw materials costs on malt barley, fuel and utility costs coupled with a depreciating local currency.
The company’s board has subsequently approved an interim dividend of two shillings and 50 cents per share.