East African Breweries PLC (EABL), the region’s largest alcoholic beverage company, announced on Thursday that it had achieved a 16 percent growth in net sales for the half year ended December 31, 2023, reaching Kshs 66.5 billion.
The company attributed the growth to resilient consumer demand and a strong and expanding portfolio of beer and spirits brands, which grew by 18 percent and 13 percent respectively.
However, the company also reported a 22 percent decline in profit after tax, which dropped to Kshs 6.8 billion compared to the same period last year. The decline was mainly driven by macro-economic factors, such as cost inflation, rising finance costs, and currency devaluation.
The company said it had incurred a foreign exchange (FX) loss of Kshs 2.3 billion, an increase of Kshs 2.1 billion versus the same period last year, due to the depreciation of local currencies against the US dollar.
“We have achieved a resilient set of results in the half-year period. Our great brand building, brilliant commercial execution, as well as consumer insight led innovation, has allowed us to continue our revenue growth momentum. However, our bottom line has been impacted by increased costs of inputs, currency devaluation and rising interest rates,” said Jane Karuku, EABL Group Managing Director and CEO.
Karuku also highlighted the company’s investment in a Kshs 1.2 billion microbrewery in Kenya, which started producing the first innovation brands during the half. She said the company had accelerated the launch of exciting beer and cider propositions, such as Tusker Cider and White Cap Lager.
She added that the company had continued to deliver on its Environmental, Social and Governance (ESG) strategy, yielding positive results around water efficiency and carbon footprint.
“Following the commissioning of our microbrewery, we have accelerated the launch of exciting beer and cider propositions. We continued to deliver on our ESG strategy, yielding positive results around water efficiency and carbon footprint,” she said.
The company also increased its advertising and promotions spend by 16.5 percent to Kshs 6.1 billion, to support its brand building efforts.
Looking ahead, Karuku said the company’s priorities for the second half were clear: to remain consumer-centric, execute brilliantly, drive cost efficiencies, grow margins, and invest smartly in its brands and business.
She also said the company would continue to deliver against its ESG commitments, while driving a high performance culture and engagement of its people.
The EABL Board has recommended an interim dividend of Kshs 1 per share to be paid on or about April 26, 2024, to its shareholders.
