The East African Breweries Limied (EABL) has recorded a net profit of Ksh 57.3 billion in sales for the first half year ended December 31, 2022.
During the half year of 2022 period, the Group’s volumes declined by 4 percent year-on-year, as price increases impacted consumer purchasing patterns.
“The East African Breweries Limited faced an exceptionally challenging time related to Macro-Economic volatility and drought situation across East Africa, global inflation, and geo-political disruptions related to the Russia/Ukraine war. This was further compounded by excise-related price increases in Kenya, effected in July and October, which significantly affected consumption of our brands,” said Jane Karuku EABL MD and CEO.
Kenya’s excise tax for beer and spirits came into effect in July 2022 following the 2022/23 Budget, increasing by 10 percent and 20 percent respectively. In October 2022, spirits and beer consumers were hit by a further 6.3 percent excise tax increase in the form of an annual inflationary adjustment.
These increases came on the back of an annual upward excise adjustment in 2021, leading to a compounded annual excise tax increase of 23% for beer and 34% for spirits.
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EABL’s net profit sales growth lapsed by 1 percent in Kenya, its largest market, while Uganda and Tanzania grew by 19 percent and 11 percent, respectively.
The Group’s slower top-line growth resulted in Ksh 8.7 billion in profit, which was flat compared to the same period last year.
The EABL Board has recommended an interim dividend of Ksh 3.75 per share, similar to the same period last year.
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“We will continue executing our outlined strategy to navigate the prevailing macroeconomic volatility, leveraging our portfolio of extraordinary brands, and smart investment, fuelled by our culture of everyday efficiency. We are also staying close to our consumers, taking advantage of our commercial capabilities and digital tools to enable us rapidly understand trends and execute with precision,” said Karuku.
EABL invested Ksh 5.5 billion in capital expenditure to extend production capacity and Environmental, Social, and Governance (ESG) initiatives.
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The ESG investment has led to 99 percent renewable energy use in half of EABL’s six sites across East Africa, significant progress on the company’s environmental agenda to accelerate its low-carbon journey.