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EABL half-year profit rises 33pc to Sh6.6bn




EABL half-year profit rises 33pc to Sh6.6bn

KBL managing director Jane Karuku with colleagues at the Kisumu plant. FILE PHOTO | NMG 

East African Breweries Limited (EABL) #ticker:EABL has registered a 33 per cent growth in half-year net earnings to hit Sh6.61 billion, driven by strong performance across all segments and markets.

The company says its improved performance in the six months ended December was also supported by continued investment in all brands and a stable operating environment in the region.

The brewer’s group revenues grew 13 per cent to Sh41.57 billion from Sh36.8 billion driven by strong performance from mainstream spirits, bottled beer and Senator Keg across the region.

“Gross profit improved by 20 per cent and profit after tax grew 33 per cent driven by strong top-line performance, positive product mix, cost efficiencies driven through the productivity initiatives and reduced interest charge,” EABL said.

The half-year results mean that EABL has achieved 91 per cent of the profit it attained in full-year ended June 2018, placing it on strong footing in 2019.

In the previous full-year ended June 2018, the firm posted a 14.8 per cent decline in profits to Sh7.25 billion, weighed down by higher costs and tax expenses. It made a tax provisioning of Sh2 billion.

Increased revenue in the period under review was coupled with increased efficiencies.

The company said innovations contributed Sh8.2 billion to net sales across the markets driven by brands such as Serengeti Lite, Tusker Cider, Black & White, Captain Morgan Gold and Uganda Waragi Pineapple.

Based on this performance, the board of directors has recommended an interim dividend of Sh2.50 per share, totaling Sh1.98 billion. This is an improvement from the Sh2 per share interim paid out in half year 2018.

The six-month performance is in line with its projected outlook that was underpinned on relative political calm in East Africa, which it said had renewed optimism in the private sector.

“This robust set of results, supported by continued investment behind our brands, places us on a great growth trajectory to achieve our performance,” EABL said.

The results further set it up on a strong growth trajectory as it plans to commission the Kisumu brewery where it has pumped Sh5 billion.

The Nairobi Securities Exchange-listed brewer, which is controlled by Britain’s Diageo, has improved its cash and cash equivalents to Sh8.75 billion, up from Sh4.58 million in December 2017.

“The strong cash performance driven by focus on working capital management resulted in a reduction of net debt,” says the company.