EABL Pre-tax Profits Up to 17.8 Billion Shillings as Revenue Spikes By 12%

The East African Breweries has released its financial year results registering a 17.8 billion shillings in pre-tax profits, up from 11.7 billion shillings at the same time in the previous financial year.

The brewer has attributed the profits to “continued focus on a broader, sharper commercial execution and accelerated marketing investment, which was up by 12 percent.

The company’s cash position improved to operating cash flow of 22.6 billion shillings compared to 13.6 billion shillings last financial year.

EABL reported a 12 percent growth in net revenue to 82.5 billion shillings for the year ended June 30, 2019, in what they attributed to broad-based performance across markets and segments.

Year-on-year performance in the first half benefited from lapping a weaker previous period, due to the uncertainty resulting from two presidential elections in Kenya. Additionally, good momentum in the second half generated solid growth on a stronger base.

The resulting profit for the year was 11.5 billion shillings representing an increase from 7.3 billion shillings reported for the same period last year.

Net sales in Kenya, EABL’s largest business, were up 13 percent buoyed by growth in mainstream spirits, Scotch and Senator Keg, up 30, 28 and 32 percent.

Bottled beer performance recovered during the period, returning 3 percent growth. The market leveraged recent capacity investments, new locally-produced innovations and price-accessible packaging in brands such as Chrome and Captain Morgan.

Net sales in bottled beer recovered strongly to grow by 8 percent while Senator sales were up 32 percent as disposable income among consumers of the low-priced beer sprang back in tandem with economic recovery in Kenya.

The Group’s mainstream spirits performance was consistent with regional growth, expanding by 23 percent. East Africa’s growing segment of aspirational consumers also helped boost growth in Scotch whiskey, up by 21 percent.

EABL Group CEO, Andrew Cowan, said: “This performance is a result of a sharpened strategic focus in the financial year, which has helped us leverage a more positive external environment, compared to the previous period. The achievement of this growth should set us off on a sustainable trajectory to deliver a better, broad-based growth across categories and markets in East Africa, where we continue gain returns on our investments and generate shareholder value.”

“We are fully conscious that the strong growth we are reporting this year is the result of a comparatively weaker performance in the last period, primarily due to political uncertainty in Kenya. However, as we leverage the growth platform we have created and the breadth of our portfolio, I am confident that the business will remain strong in a potentially more adverse and volatile environment in the future,” he added.