East African Breweries Limited (EABL) has announced a pre-tax profit of Kshs 7.2 Billion during the half-year ending 31 December 2019, this was a 9% growth from the same period last year.
The rise in profitability was on the back on a 10% rise in net sales to Kshs 45.9 billion, driven by higher volumes, up 5% across the Group and categories, and better price mix across all brands.
In the Kenyan market, net sales grew by Kenya, grew by 8%, with beer and spirits growing by 6% and 11%, respectively. The market registered an outstanding performance in Senator keg, with the iconic, low-priced beer growing by a fifth, with the new Kisumu investment driving growth. Mainstream spirits and Scotch whisky sales increased by 17% and 23% respectively, with remarkable performance of Black & White. The increase in excise duty drove bottled beer decline of -1%, despite successful brand campaigns such as Tusker Na Nyama and Guinness Football.
Uganda Breweries’ premiumisation agenda delivered better mix and margins, helping lift net sales by 10%, driven by 15% growth in beer and 1% in spirits, the latter was also impacted by the ban of the sachet format. Marketing campaigns such as Bell All-Star Tour and Tusker Lite Neon Experience helped drive bottled beer growth by 15%. Launch of Black & White whisky helped lift Uganda’s Scotch performance with net sales rising by 84% while the ready-to-drink category grew by 18%.
Serengeti Breweries in Tanzania, the Group’s fastest growing business, expanded by 19%, lifted largely by a consistent performance in local executions to drive the Serengeti trademark.
EABL Group Managing Director and CEO, Andrew Cowan, had this to say, “We are pleased by this performance. Although excise duty escalation on alcoholic beverages in Kenya’s last budget impacted bottled beer, a more stable operating environment provided an opportunity to continue our growth momentum during the period. We remain cautiously optimistic about our second half of the year, although unpredicted tax and regulatory changes and challenges in our operating environment continue to present potential risks in the horizon.”
As part of the recently announced Kshs 22 billion sustainability investment to be spent across East Africa, EABL has embarked on projects across East Africa to leverage renewable energy in biomass and solar as well as water recovery and treatment. These sustainability plans are geared towards reducing carbon emissions by 42,000 tonnes, save over a billion cubic litres of water annually and produce up to 10% EABL breweries’ power needs.
The Board of Directors recommended an interim dividend of Kshs 3 per share for the half-year period. This represents a 20% increase from Kshs 2.50 in the same period last year.