EABL bounces back to bullish performance more than doubling its half year profit
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KENYA – East African Breweries PLC (EABL), has raised a glass to an exceptional first half year ended December 31, reporting growth on both the top-line and bottom-line performance.
The brewer’s profit after tax, termed as best in the last five years, grew by 131% to Kshs 8.7 billion (US$76.5m).
This was primarily driven by the higher net sales, margin expansion, robust cost management and the re-opening of bars in Kenya in the second quarter.
The performance is compared to a profit after tax of Ksh3.8 billion (US$33.5m) that the alcoholic drinks maker attained in the first six months of 2020, a period when alcohol sales were ravaged by the negative effects of the Covid-19 pandemic, including the closure of bars and the dusk-to-dawn curfew.
During the period under review, EABL’s net sales jumped by 23.5% to Ksh.54.9 billion (US$483m) from Ksh.44.5 billion (US$391.5m) previously, realised through strong organic growth across East Africa.
The Kenyan market led the recovery with net sales increasing by 27%, primarily due to accelerated strategic investment behind brands and channels, coupled with re-opening of bars in the second quarter.
Meanwhile net sales in Uganda jumped 18% driven by the market’s agile response to the shifting consumer trends as well as strategic pricing decisions.
“Uganda’s innovative channel delivery model ensured outstanding last-mile success, guaranteeing growth,” stated EABL.
In neighbouring Tanzania, growth momentum continued through increased strategic investment behind brands and innovations resulting to net sales growing by 15% with beer and spirits registering double-digit growth.
The beefed-up investment behind brands and innovation in the route to market in response to consumer behaviour shifts triggered volume growth by 23%.
Additionally, the continued investment in capacity of Kshs 6.2 billion (US$54.5m) enabled EABL to rapidly respond to the increased consumer demand.
“During this pandemic, our strategic clarity enabled us to maintain focus on brand-building, active portfolio management, consumer-led innovation, and digital transformation, all executed through extra-ordinary efforts and resilience of our people,” EABL Managing Director Jane Karuku said.
Looking into the future, Mrs Karuku noted that the trading environment remains uncertain with the lingering socio-economic impact of the pandemic, excise tax volatility, and the upcoming electioneering period in Kenya.
However, EABL has expressed cautious optimism on future growth as it expects improving consumer incomes and the recovery of on-trade trading and the resilience of its off-trade to sustain the growth in sales.
Other than looking at the profitability of the business, the company is committed to its 10-year sustainability programme.
This is a three-pronged agenda aimed at promoting positive drinking, championing diversity and inclusion and pioneering grain to glass sustainability across our value chain.
For instance, EABL’s regional effort to support the hospitality sector through the pandemic has gathered pace, with 60% of the Raise the Bar fund (US$5m) already spent.
This fund is enabling physical and digital support to bars welcoming customers back after lockdowns.
The owner of Tusker, Gordon whisky and Chrome gin brands, has also complemented government efforts across the region in driving national programmes to combat the impact of COVID-19, vaccinating our employees, their families, and consumers.
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