- EABL’s Group net sales grew 23% to KSh 54.9 billion, realised through strong organic growth across East Africa
- Profit after tax improved by 131% to KSh 8.7 billion, driven by margin expansion, prudent cost
management, and volume recovery mainly in Kenya
- Cash and cash equivalents up 185% to KSh 7.2 billion, driven by increased net sales and robust working capital management
East African Breweries PLC (EABL) has reported KSh 54.9 billion in net sales for the half-year ended 31 December 2021, representing a 23% growth compared to the same period last year.
During the period, volumes grew strongly at 23%, driven by investment behind brands and innovation in the route to market in response to consumer behaviour shifts.
The continued investment in the capacity of KSh 6.2 billion enabled EABL to rapidly respond to the increased consumer demand.
The Group’s profit after tax grew 131% to KSh 8.7 billion, primarily driven by the higher net sales, margin expansion, robust cost management and the re-opening of bars in Kenya in the second quarter.
“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.
Markets Sales Highlights for the Half-year:
During the period, net sales in Kenya increased 27% primarily due to accelerated strategic investment behind brands and channels.
The re-opening of bars in the second quarter further improved the net sales growth.
In Uganda, net sales grew 18% driven by the market’s agile response to the shifting consumer trends and strategic pricing decisions.
“Uganda’s innovative channel delivery model ensured outstanding last-mile success, guaranteeing growth.”
In Tanzania, net sales grew 15%, with beer and spirits registering double-digit growth. Growth momentum continued through increased strategic investment behind brands and innovations.
Commenting on EABL’s Environmental, Social and Governance (ESG) agenda, Karuku said: “We continue
to focus on Spirit of Progress, our 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.”
“Our regional effort to support the hospitality sector through the pandemic has gathered pace, with 60% of the
Raise the Bar fund (KSh 570 million) already spent. This fund is enabling physical and digital support to bars
welcoming customers back after lockdowns. EABL 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.
The CEO added 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, we are cautiously optimistic that the regional economies will continue on the recovery path,
sustaining growth momentum across East Africa.”
The Board has recommended an interim dividend of KSh 3.75 per share. This reflects EABL’s strong
performance and confidence in the long-term growth and sustainability of our business.
How EABL sustained profitability despite devastating pandemic
In a related story, The Exchange Africa reported that EABL has recorded a 15 per cent growth in revenue to KSh 86 billion for the year ended June 2021.
According to the brewer, profit after tax for the period declined 1 per cent to KSh 7 billion mainly impacted by cost inflation, tax and foreign exchange impact.
Further, the COVID-19 related tax reliefs in Kenya on corporation tax and VAT ended in December 2020, resulting in higher tax charges for the year as the rates reverted to pre-COVID levels.
The company said the slower profit growth rate was driven by the impact of cost inflation, adverse foreign exchange and tax charges.
During the period under review, EABL’s Kenyan subsidiary Kenya Breweries Limited (KBL) registered 10 per cent year on year revenue growth, with the second half-year growing 45 per cent off-setting a 10 per cent decline in first half-year.
According to the company, performance in Kenya was driven by expanding and adapting the product portfolio to meet emerging channels and new consumer occasions while continuing to invest ahead on our strategic brands.
The Uganda Breweries Limited (UBL) revenues grew 33 per cent year on year, with beer and spirits both recording double-digit growth.
According to the brewer, growth was driven by the business’ agility in response to the changing consumer shifts and emerging channels.
The business also invested in capacity expansion to support sales growth in line with EABL’s strategy.
Meanwhile, Serengeti Breweries Limited (SBL) revenues were up 15 per cent, with beer and spirits both registering double-digit growth.
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