NAIROBI, KENYA: East African Breweries Limited has posted a 33 per cent growth in half-year profit after tax from Sh4.9 billion in 2017 to Sh6.6 billion in 2018.
The jump in profit is attributable to increased revenues and continued cost efficiencies across the organization. The company’s revenues for the period rose by 13 percent to Sh41.6 billion driven by stable operating environment in the region.
“We have delivered a strong set of performance across all segments and markets compared to a weak half-year during the same period last year. Our continued investments across all our brands places us on a great growth trajectory,” said Joyce Munene, Group Company Secretary.
EABL Group CEO, Andrew Cowan, said: “We have delivered a solid set of results and we are pleased with this half-year performance. We have made progress against our performance ambition, delivering broad-based growth across regions and categories. There is still a lot more to do across all our markets, but this half-year performance proves that we can get there if we continue to focus on strategic execution across our business.”
He added: “Our strategy, which aims to deliver a vibrant mainstream beer, explode our mainstream spirits, win in premium and recruit from illicit alcohol, has given all our businesses a broad and solid foundation from which to deliver a more consistent performance in the future.”
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In Kenya, growth in beer was driven by Senator Keg, up 35 percent, as a result of increased distribution, commercial initiatives as well as the rejuvenation of the brand through powerful national campaigns. Sustained marketing investments behind key bottled beer brands such as Tusker (Tusker Masaa ya Mbili Mbili) and Guinness (Win a Chance to Meet Rio Ferdinand) helped deliver that bottled beer performance year-on-year, despite the impact of excise-driven price increase.
Spirits net sales grew 17 percent driven by mainstream spirits. The growth in mainstream spirits benefitted from increased investments in spirits capacity in Kenya which has helped support the launch of successful local innovations such as Captain Morgan Gold.
Uganda’s beer net sales grew 11 percent driven by the premium and mainstream categories, supported by campaigns such as Bell All Stars Tour, Pilsner Super 8 and Tusker Lite’s Absolutely Nothing to Prove. Spirits net sales grew 16 percent, led by growth in mainstream spirits.
Tanzania’s growth momentum continued during the period at 26 percent, driven by consistent growth of the Serengeti trademark up 65percent, supported by Lite with a bite Serengeti Lite Promotion and National football team sponsorship.
Reflecting on the half-year ahead, Cowan said: “In the last financial year, we deliberately invested behind our performance ambition through a step-change in our investments behind brands, capital expenditure and capability to sustain future growth momentum. With our new brewery set to become fully operational soon, we expect to provide more and better drinking options, expanding our beverage alcohol universe further.”
The company said its new plant in Kisumu is set to be launched soon.
According to KBL, the Sh15 billion plant promises up to 100,000 jobs in its value chain.
Up to 30,000 sorghum farmers are being asked to provide the sorghum for brewing the low-end market senator keg.
Farmers are expected to deliver 15,000 tonnes of sorghum to the plant, in the first year of operation.
