NAIROBI, Kenya – East African Breweries Limited (EABL) has faced a challenging fiscal year, with a notable 12% drop in net profit to Sh10.9 billion for the year ending June 30.
This decline, from Sh12.3 billion the previous year, comes despite an impressive 13% increase in net sales, which rose to Sh124.1 billion from Sh109.6 billion.
The devaluation of the Kenyan shilling and other local currencies significantly impacted profitability, erasing gains from strong sales performance across its key markets of Kenya, Uganda, and Tanzania.
Despite the economic headwinds, EABL saw growth in net sales driven by a 1% increase in volume, strategic pricing, and innovative product offerings.
Beer sales surged by 9%, contributing to overall market growth of 15% in Kenya, 12% in Uganda, and 9% in Tanzania.
The brewer’s diverse portfolio and effective market strategies played crucial roles in this sales increase, demonstrating the company’s ability to navigate a challenging and unpredictable economic landscape.
The gains in sales were overshadowed by the significant devaluation of local currencies and a tough microeconomic environment.
These factors, coupled with high interest rates and increased costs, particularly in the first half of the fiscal year, raised the group’s cost base, heavily impacting net earnings.
Operating profit, excluding forex effects, grew by 10% to Sh28.8 billion, yet these gains could not offset the losses brought on by the weakening shilling and other economic pressures.
In a move to reassure investors, EABL’s board declared a final dividend of Sh6 per share, totaling Sh7 per share for the year, an increase from the previous year’s Sh5.50 per share.
Jane Karuku, EABL Group Managing Director and CEO highlighted the company’s resilience and strategic execution in the face of adversity.
“We have delivered solid double-digit topline and operating profit growth in a challenging environment, highlighting the strength of our core business and our ability to capture market opportunities effectively,” she stated.
Karuku emphasized the role of the group’s diverse portfolio, innovative commercial strategies, and enhanced digital capabilities in achieving these results.
