East African Breweries PLC (EABL) has reported Kshs. 8.7 Billion net profit for the half year ended 31 December 2022. This represents a 0.4% decline from the profits announced in a similar period last year.
During this period, Group volumes declined by 4 percent year-on-year, as price increases impacted consumer purchasing patterns, mainly in mainstream and value segments. In July 2022, Kenya’s excise tax for beer and spirits came to effect following the 2022/23 Budget, increasing by 10 percent and 20 percent, respectively. In October 2022, beer and spirits consumers were hit by a further 6.3 percent excise tax increase in the form of annual inflationary adjustment. These increases came on the back of an annual upward excise adjustment in 2021, leading to a compounded annual excise tax increase of 23 percent for beer and 34 percent for spirits. Consequently, beer volumes were down 13 percent in Kenya, with performance further undermined by a re-emergence of illicit alcohol during the period under review.
As a result, EABL’s net sales growth regressed by 1 percent in Kenya, its largest market, while Uganda and Tanzania grew by 19 percent and 11 percent, respectively. The Group’s slower top-line growth resulted to Kshs 8.7 billion in profit, which was flat compared to the same period last year. The EABL Board has recommended an interim dividend of Kshs 3.75 per share, similar to the same period last
EABL Group Managing Director & CEO, Ms. Jane Karuku said: “EABL faced an exceptionally challenging time related to macro-economic volatility and drought situation across East Africa, global inflation, and geo-political disruptions related to the Russia/Ukraine war. This was further compounded by excise-related price increases in Kenya, effected in July and October, which significantly affected consumption of our brands. We will continue executing our strategy to navigate the prevailing macroeconomic volatility, leveraging our portfolio of extraordinary brands, smart investment, fuelled by our culture of everyday efficiency. We are also staying close to our consumers, taking advantage of our commercial capabilities and digital tools to enable us rapidly understand trends and execute with precision.”
During the period under review, the business continued to invest smartly behind brands, digital capabilities and consumer experiences. EABL also invested Kshs 6.7 billion in capital expenditure to extend production capacity and Environmental, Social and Governance (ESG) initiatives.
The ESG investment has led to 99 percent renewable energy use in half of EABL’s six sites across East Africa, a significant progress on the company’s environmental agenda to accelerate its low-carbon journey.