EABL posts Ksh7.3bn full year profit, eyes growth
East African Breweries Limited (EABL) has posted a 15 percent drop in its 2017/18 financial year which stood at Ksh7.3 billion down from Ksh8.8 billion a year earlier.
The drop in profitability was occasioned by a one off tax bill of Ksh2 billion, which masked the brewer’s relatively strong performance during the year.
EABL bounced back in the second half of the year helped by increased beer and spirit sales.
This saw revenue rise five percent to Ksh73.5 billion.
Speaking while releasing the results, EABL group managing director Andrew Cowan said a decision taken to maintain investments in its operations under the volatile environment enabled revenues to bounce back in the second half of the year.
“When many companies were anchoring down and protecting their investment profiles I am pleased that my management team pressed ahead with investments for growth as promised to our investors at the start of the year. When times were tough, this was our most robust and courageous profile,” Mr Cowan said.
EABL’s performance was also backed by growth in Tanzania, which contributes 11 percent of revenue, driven by strong sales of Serengeti beer.
In keeping with its investment drive, the brewer is investing millions of dollars in new brewing tanks at its Tanzania plant to take advantage of the consumer demand.
Mr Cowan said EABL sees the opportunities for further growth in the commercialization of the newly constructed Kisumu brewery and a strengthened recruitment of bottled beer consumers.
“We think we will be selling Keg out of that plant to locals around the Kisumu region and the west of Kenya before Christmas,” he said.
The firm also hopes to go bolder on its productivity initiatives even as it seeks to sustain the growth momentum through the acceleration of innovations.
“We continue to make significant investments to the business in line with our strategy even as we increase the quality and capacity of our products. We hope to see a significant contribution to the net-sale value coming out of innovation,” EABL group chairman Charles Muchene said.
The EABL board has recommended a final dividend of Ksh5.50 per share.