Uganda and Tanzania came second and third respectively at 18 per cent and 11 per cent as East African Breweries Ltd’s (EABL) after-tax profit for the year ending June, grew 5 per cent to KSh6.85 billion (about Shs203 billion) riding on improved performance by most of its products. Kenya remained the group’s biggest market, contributing 64 per cent of the total sales.
Announcing the results last week, group managing director Charles Ireland said profitability was weighed down by the introduction of new taxes on Senator Keg and political instability in South Sudan where it opened a depot in in the first quarter. “We are generally happy with the results but we believe we could have done better. All our products posted positive growth except Senator Keg,” said Mr Ireland. Senator sales dropped by 75 per cent during the review period. Sales went up by 4 per cent to Sh61.2 billion (about Shs1.8 trillion) during the year.
Other markets in which EABL is present across the region contributed 7 per cent.
The directors have proposed a final dividend of KSh4 (about Shs119), bringing the total pay out to KSh5.50 (SHS163.5) per share. An interim dividend of Sh1.50 (about Shs44.5) was paid after the half year financial results.
Tapping into spirits
The beer company recently revealed that it will focus on the spirits segment to make up for revenue loss from the low-end focused Senator Keg as hopes of the tax’s reversal dimmed. Diageo said the tax had raised the price of Senator Keg resulting in poor beer sales.
An investor presentation by Diageo chief executive Ivan Menezes indicated that the decision to use spirits to target the low-end is based on doubts that the Kenyan treasury would review its decision to raise taxes on Senator Keg.