East African Breweries Limited (EABL) has announced a pre-tax profit of Ksh.10.6 billion during the half-year ending 31 December 2019, representing a 9% increase compared to the same period last year.
Profit after tax also grew at the same rate, reaching Ksh.7.2 billion during the period under review. Net sales were up 10% to Kshs 45.9 billion, driven by higher volumes, up 5% across the Group and categories, and better price mix across all brands.
“We are pleased by this performance. Although excise duty escalation on alcoholic beverages in Kenya’s last budget impacted bottled beer, a more stable operating environment provided an opportunity to continue our growth momentum during the period. We remain cautiously optimistic about our second half of the year, although unpredicted tax and regulatory changes and challenges in our operating environment continue to present potential risks in the horizon,” EABL Group Managing Director and CEO, Andrew Cowan, said in a statement.
EABL leveraged increased investment and operational efficiencies across markets and segments to expand, despite increases in alcoholic beverage taxes. Net sales in EABL’s largest market, Kenya, grew by 8%, with beer and spirits growing by 6% and 11%, respectively. The market registered an outstanding performance in Senator keg, with the iconic, low-priced beer growing by a fifth, with the new Kisumu investment driving growth.
EABL leveraged several innovation initiatives during the half year, with new brands contributing 28% of the net sales. Recently launched brands such as Hop House 13 Lager, Guinness Smooth, Sikera Cider, Black &White whisky and Triple Ace vodka contributed significantly to growth.
EABL will invest further during the financial year, to consolidate gains so far made in its production, commercial and sustainability capacities across the region. Having made a total investment of Ksh. 14 billion in the Kisumu brewery in the previous years, the Group has invested a further Ksh. 4.4 billion in production capacity improvements for existing and new brands.
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