, NAIROBI, Kenya, Jan 25 – East African Breweries Limited (EABL) has announced a Sh4.95 billion profit after tax from revenues of Sh36.8 billion for the half-year ended December 2017.
EABL’s volumes grew by 4 percent and revenues rose by 5 percent for the period but net earnings were impacted by consumer weakness in the Kenyan market relating to the protracted election process and excise-tax changes in Uganda.
Profit after tax is however down by 11 percent compared to the same period last year as a result of an 18 percent increase in investment in brands and sales, and higher interest charge on long-term borrowings.
EABL increased investment in sales and advertising and accelerated capital investment to boost future capacity for Senator and spirits.
“It is encouraging that bottled beer is in recovery and mainstream spirits continues to grow strongly. Our increased investment in our brands in sales and advertising underlines our bold strategy to pursue existing and emerging growth in all segments of our business,” says EABL Group MD Andrew Cowan.
Excluding Senator Keg, Kenya’s volume performance was up 8 percent driven by the resurgent performance of bottled beer and a double-digit growth in spirits.
Senator keg was down 22 percent as its performance was impacted by a partial shut-down to expand capacity and higher consumer prices exacerbated by an extended period of elections impacting consumer activity and expenditure.
“We have refreshed our focus around our marketing strategy, expanding our route to consumer to broaden the reach of our products across markets whilst innovating at scale. I am particularly impressed by our innovation agenda with our brands such as Tusker Cider, Serengeti Lite and Uganda Waragi Coconut which contributed 21% to our half-year net sales,” added Cowan.
Cowan said the Sh5 billion investment in capacity expansion for spirits and Senator keg production over the period positions the company appropriately for the future, noting that construction of the new Sh15 billion brewery in Kisumu was going on as planned.
The Board of Directors has recommended an interim dividend of Kshs 2.00 per share for the half-year period, at the same level as last year.