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Coronavirus drinks Sh2.86bn of EABL’s profits

NAIROBI, Kenya, May 16-East Africa Breweries Limited has warned of up to 25 percent losses in net sales for the financial year ending June 2020 on disruption of business by the coronavirus outbreak.

EABL Board Chairperson Martin Oduor in a statement on Saturday to its shareholders said the firm is expecting losses of up to Sh2.86 billion for the current financial year.

“EABL’s current performance forecast indicates a decline in profit after approximately 25 percent for the financial year ending June 30 2020 versus prior year,” said Oduor.

The brewer that operates in Kenya, Uganda and Tanzania, has attached the profit decline to restrictions brought about by the COVID 19 pandemic.

“The COVID 19 global pandemic and the subsequent response measures taken across the region have impacted our business negatively,” reads the chairperson statement.

The profit warning statement comes at a time when National Authority for the Campaign Against Drug Abuse raised a red flag over increase in online advertisement and home deliveries of alcohol.

This is after the government ordered the closure of night clubs as a precaution measure the country was taking since it reported its first coronavirus case in March 13.  

It also introduced a dusk to dawn curfew and urged for avoidance of crowded places such as entertainment premises.

The brewers parent company Diageo warned of Sh41 billion hit in its sales for the financial year where the virus has disrupted consumption.

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Diageo in March linked the expected dip on the evolving coronavirus pandemic that has reduced consumption, with bars halting operations in some markets such as China and many cities in Europe.

“Bars and restaurants have largely been closed and there has been a substantial reduction in banqueting,” Diageo said in a statement in March.

EABL Kenya last year reported a 14.79 per cent drop in net profit in the year ending June 2019 at Sh7.25 billion on higher costs and tax expenses.

The NSE listed brewer saw its revenue rise 4.57 percent to Sh73.45 billion driven by its bottled beer business in Kenya and Tanzania and the spirits segment.

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