East African Breweries half year profits grow 33% to US$96.2m

KENYA – East African Breweries Limited has posted pre-tax profits of US$96.2 million in its half year results for the period ending 31 December 2018 representing a 33% increase in profits compared to the same period last year.

In its financial results, the company’s net sales grew 13% to US$ 412 million (Kshs 41.6 billion) with Kenya and Uganda both recording a 12% increase in net sales while Tanzania’s sales were up 26%.

EABL said that growth was broad-based across segments and regions, as the business benefited from lapping a weak half following the presidential election in Kenya.

According to the firm, beer grew 12%, driven by Senator Keg performance in Kenya, improved mix in Uganda and continued strong delivery of its Serengeti brand in Tanzania.

On the other hand, Spirits grew 16% on the back of strong performance in mainstream spirits and Scotch whisky as well as investments leading to vibrant innovations.

Greater focus on productivity coupled with up-weighted marketing investment were noted to be the major drivers of its 33% growth in Pre-tax profit.

Additionally, Strong cash conversion and lower interest rates resulting to a reduction in interest charge in the year also helped boost the bottom-line.

EABL Group Chief Executive Officer, Andrew Cowan noted that the firm will continue focusing on strategies that will strengthen its performance.

“We have delivered a solid set of results and we are pleased with this half-year performance.

We have made progress against our performance ambition, delivering broad-based growth across regions and categories.

There is still a lot more to do across all our markets, but this half-year performance proves that we can get there if we continue to focus on strategic execution across our business,” said Andrew Cowan.

In its Kenyan business, growth in beer was largely pinned to 35% increase in sales of the brand Senator Keg as a result of increased distribution, commercial initiatives as well as the rejuvenation of the brand through powerful national campaigns.

“With our new brewery set to become fully operational soon, we expect to provide more and better drinking options, expanding our beverage alcohol universe further,” Andrew Cowan added.

The firm had also embarked on sustained marketing investments behind key bottled beer brands such as Tusker and Guinness which helped deliver that bottled beer performance year-on-year.

“In the last financial year, we deliberately invested behind our performance ambition through a step-change in our investments behind brands, capital expenditure and capability to sustain future growth momentum,” said Andrew Cowan.

The Board of Directors has recommended an interim dividend of Kshs 2.50 per share for the half-year period which represents a 25% increase, compared to the same period last year.

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