EABL doubles profit after lifting of Covid-19 curbs

The profit is its highest in five years. [iStockphoto]

Alcoholic beverage manufacturer East African Breweries Ltd (EABL) more than doubled its profit last year aided by the lifting of restrictions to curb the spread on Covid-19.

The company’s net profit grew 124 per cent in the year to June 2021 to Sh15.57b compared to Sh6.96b previously. The profit is its highest in five years. The growth was on account of increased revenues that went up to Sh193.85b over the review period from Sh152.57b in the year to June 2020, translating into a 27.1 per cent growth.

“The financial year has seen East African economies recover from the initial impact of the Covid-19 pandemic. Nevertheless, the second half of the year brought new challenges in form of runaway inflation, foreign exchange currency fluctuation and reduced consumer purchasing power,” said Group Chairman Martin Oduor-Otieno at a press briefing in Nairobi yesterday.

The firm added that in addition to growth in revenues, profits were lifted by its ability to navigate rising inflation and increase in excise taxes through strategic pricing and effective cost management. The brewer said revenues from its operations in Kenya, Uganda and Tanzania grew 30 per cent, 24 per cent and 21 per cent respectively.

The firm, however, decried high taxation, forking out Sh87.7b to the three governments up from Sh74 billion in 2021.

“Although these results show we are now ahead of our pre-Covid-19 growth trajectory, the challenging macro-economic environment, volatile tax and regulatory policy will continue to impact our business,” said Group Chief Executive Jane Karuku.

“While our business has performed strongly this year, we expected near-term volatility to persist.”

It had to increase prices for some of its products in Kenya and Uganda following a review of excise duty on alcohol.

“The region has some of the highest alcohol excise rates in the sub-Saharan region, with the excise regime in Kenya becoming increasingly aggressive and unpredictable, creating uncertainty for businesses like ours,” said the firm.

EABL had paid its shareholders an interim dividend of Sh3.75 per share and has now recommended a final dividend of Sh7.25 per share subject to shareholder approval.

This will bring the dividend paid to shareholders for the financial year to June to Sh11 per share.