Kenya brewer posts Sh4b profit

February 16, 2010

, NAIROBI, Kenya, Feb 16 – East African Breweries Limited (EABL) has announced an after tax profit of Sh4.46 billion for the half year results ended December 31, 2009.

Although it’s a marginal decline from Sh4.9 billion posted in the corresponding period last year, the group’s net turnover went up by three percent to Sh18.6 billion.

Managing Director Seni Adetu said despite the harsh operating environment, the firm registered growth in its key brands such as Tusker and Guinness by 18 percent and 22 percent respectively.

“We have significantly increased our marketing spend in Kenya.  There’s a lot of support for some of our brands. Additionally, we are very strong on innovation and renovation as well as improving the capability of distributors to ensure that our root to market is solid,” he explained of the factors that had contributed to their growth.

The board has recommended an interim dividend payout of Sh2.50 for each share held.

The high taxation imposed on spirits however affected their sales volumes which recorded a 53 percent decline compared to the previous year.  However a reversal on the taxation is anticipated to have a positive impact on the spirit business, Mr Adetu added.

He said they plan to invest Sh2.6 billion in various projects which should contribute to the positive outlook they project for the second half.

“In the context of what we are seeing now, we are confident that second half will be more positive than what we have seen in the first half,” he said adding that a growth in the GDP would translate into more disposable income for their consumers.

Sh1.8 billion has already been injected in additional capital investments to improve capacity and quality at its Nairobi and Kampala plants. A new packaging line with a capacity of 80,000 bottles per hour in Kenya has been installed while a new packaging line in Uganda with a capacity of 50,000 bottles per hour will be commissioned by October this year.

The company, which has been focusing more on Uganda in recent years, said it was catching up with competition to whom it was previously losing its market share to.

In the future, Uganda and the Great Lakes countries like Rwanda, Burundi and Sudan are some of the areas they would target to drive their growth and ensure their stronghold.

At the same time, he revealed that they were considering venturing into the manufacturing of wine.

Although he did not divulge further details, the plan would be part of the initiatives aimed at driving growth in the countries they operate in. The others initiatives include the enhancement of Senator Keg’s footprint, which is a drink targeted at the low end market.

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