East African Breweries Limited (EABL) has announced that it has registered a Ksh. 7 billion net profit in the financial period ending 30th June 2020. This is a decrease from the Ksh. 11.5 billion that was reported in the previous year.

The beer manufacturer has blamed the decline in the growth of the sales by 29% in the second half of the financial year. This is due to the effects of the COVID-19 pandemic which has created a financial crisis in Kenya which has also led to reduced income for consumers. Sales in Kenya and Uganda declined by 14% and 5% respectively while Tanzania grew 14% on the back of less stringent restrictions.

The pandemic also led to a partial lockdown that saw bars being closed which locked a key channel for EABL. Bars were open for a short period before being barred again from selling alcohol. However, the company has announced that it has successfully explored other channels such as supermarkets, wine and spirits and online platforms such as Yum Turnup, Jumia Party among others.

The company had started well with a 10% growth in sales in the first half of the financial year. One of the segments that were doing well were Scotch Whiskey (Johnny Walker) and beers (Guiness, Tusker, Serengeti and WhiteCap Lager).

EABL Group MD and CEO, Andrew Cowan, said: “During this unwelcome pandemic, our top priority has been to safeguard the health and well-being of our people and support our communities, while taking necessary action to protect our business. Across the markets we have tracked changes in consumer behaviour and repurposed our execution plans in trade to continue serving our consumers where safe and possible to do so.”

Mr. Cowan said EABL focused on managing working capital tightly in the last quarter, reducing discretionary expenditure and reallocating resources such as advertising and promotion (A&P) spend to new and emerging channels in order to serve our consumers safely.

EABL has made a significant contribution through trade and community initiatives across the region. To help East African communities emerge from the effects of the pandemic, EABL has funded provision of hand sanitisers distributed to frontline health workers and vulnerable communities to the tune of Ksh. 70 million. Further, the company donated Ksh. 50 million to Kenya’s Covid-19 Emergency Fund, bringing the total contribution towards the pandemic to Ksh. 120 million.

In Uganda, UBL donated hospital mattresses, hand-washing stations and fuel to enable frontline health workers alleviate situation in healthcare centres. And in Tanzania, SBL delivered a hygiene awareness programme and donated hand-sanitisers to help combat the spread of the pandemic.

In view of the pandemic’s impact on bar owners across East Africa, EABL is committing Ksh. 500 million to support the recovery of on-trade outlets in Nairobi, Kampala and Dar es Salam as part of Diageo’s $100 million ‘Raising the Bar’ global fund. This funding will be used to support the implementation of hygiene measures, provision of practical equipment and provision of free digital support and training to enable outlets transform how consumers will be served when bars reopen.

“Going forward, our market teams have put in place robust plans to help us emerge stronger from this crisis once the measures are eased across our markets. We will continue to execute with discipline and invest prudently to ensure we are strongly positioned for a recovery in consumer demand,” Mr. Cowan said.

In recognition of the uncertainty in the external environment in the face of the Covid-19 pandemic and the need to conserve cash to support the business, the Board of Directors do not recommend a final dividend. Consequently, the interim dividend of KShs 3 per share paid in April 2020 will be the full and final dividend for the year.