EABL full-year profit down 12pc to Sh11b on inflation and unrest

From left, EABL Group Chairman Martin Oduor-Otieno, CEO Jane Karuku, CFO Risper Ohaga and KBL MD Mark Ocitti during the release of 2024 full-year results. [Courtesy]

East African Breweries Ltd (EABL) net profit for the full year ended June 30 fell by 12 per cent to Sh10.9 billion as inflation, shilling devaluation, social unrest, and floods ate into its net sales

The profit dropped from Sh12.3 billion that the brewer posted last year to Sh10.9 billion, from its Kenya, Uganda and Tanzania markets.

In the fiscal year ended June 30, 2024, the brewer reported net sales of Sh124.1 billion, representing a double-digit growth of 13 per cent compared to the previous year.

Despite the drop in profit, the EABL board has declared a final dividend of Sh6 per share, bringing the total dividend to Sh7.00 per share, an increase of Sh1.50 per share compared to the total last dividend payout.

While releasing the financial results in Nairobi, EABL noted that the local supply of ethanol dried out, driving up the cost of production, coupled with forex impact. “This year, we have managed to get local supply to augment that, and the impact has been reduced. The cost is reduced compared to last year,” said Risper Ohaga, the EABL chief finance officer.

She added that to manage this cost, what would help is consistent local availability of ethanol at a favourable price. "The supply of industrial sugar is low, working on sugar reforms in the country will not only help us with sugar but also ethanol, which is a by-product of sugar,” she said.

In the first half of the financial year, EABL said it saw a massive depreciation of 23 per cent of the Kenya shillings, and the second half slowed down to about 13 per cent.

The increased net sales and operating profit were attributed to volume growth of one per cent on account of nine per cent growth in beer sales.

Growth was recorded across its three core markets with Kenya at 15 per cent, Uganda at 12 per cent and Tanzania at nine per cent whilst beer and spirits also grew by 12 per cent and 14 per cent respectively.

EABL said it achieved these results on the backdrop of a challenging and unpredictable operating environment characterised by reduced consumer purchasing power, higher cost of living, as well as disruptions brought about by El Nino rains and political unrest.

"We have delivered a 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.  Additionally, effective supply productivity allowed us to mitigate some of the impacts of cost inflation,” said EABL chief executive Jane Karuku.