EABL’s Net Sales Hit 13% as Profit After Tax Rises to Ksh 6.6 Billion

East African Breweries Limited (EABL), on Thursday 24, announced a pre-tax profit of 9.7 billion shillings during the half-year ending 31 December 2018, representing a 33 percent rise compared to the same period last year.

The company’s net sales grew 13 percent to 41.6 billion shillings. Growth was broad-based across segments and regions, as the business benefitted from lapping a weak half following the presidential election in Kenya.

Kenya and Uganda both saw net sales increase by 12 percent and Tanzania was up 26 percent. Beer grew 12 percent, driven by Senator Keg performance in Kenya, improved mix in Uganda and continued strong delivery of Serengeti in Tanzania.

Spirits grew 16 percent on the back of strong performance in mainstream spirits and Scotch whiskey as well as vibrant innovations.

Pre-tax profit growth of 33 percent was attributed to a continued focus on productivity, partially offset by up-weighted marketing investment.  Strong cash conversion and lower interest rates drove a reduction in interest charge in the year, helping boost the bottom-line.

“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 EABL Group CEO, Andrew Cowan.

He added that the company’s strategy, which aims to deliver a vibrant mainstream beer, explode its mainstream spirits, win in premium and recruit from illicit alcohol, has given earned the businesses a broad and solid foundation from which to deliver a more consistent performance in the future.

In Kenya, growth in beer was driven by Senator Keg, up 35 percent, as a result of the increased distribution, commercial initiatives as well as the rejuvenation of the brand through powerful national campaigns.

Sustained marketing investments behind key bottled beer brands such as Tusker (Tusker Masaa ya Mbili Mbili) and Guinness (Win a Chance to Meet Rio Ferdinand) helped deliver that bottled beer performance year-on-year, despite the impact of the excise-driven price increase.

Spirits net sales grew 17 percent driven by mainstream spirits. The growth in mainstream spirits benefitted from increased investments in spirits capacity in Kenya which has helped support the launch of successful local innovations such as Captain Morgan Gold.

Uganda’s beer net sales grew 11% driven by the premium and mainstream categories, supported by campaigns such as Bell All-Stars Tour, Pilsner Super 8 and Tusker Lite’s Absolutely Nothing to Prove. Spirits net sales grew 16 percent, led by growth in mainstream spirits.

Tanzania’s growth momentum continued during the period at 26 percent, driven by consistent growth of the Serengeti trademark up 65 percent, supported by Lite with a bite Serengeti Lite Promotion and National football team sponsorship.

“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. 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,” said Mr. Cowan as he reflected on the half-year ahead.

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