By Tullah Stephen
East African Breweries Limited (EABL), on Thursday announced a seven per cent increase in profit for the full year ended in June 2016. The beer maker recorded a KSh10.3 billion profit up from 9.5 billion in the same period last year.
In a statement released by EABL, performance was buoyed by the growing consumption of low-end beer and spirit category. EABL products segments experienced growth with emerging beer category which includes brands such as Senator in Kenya, Ngule and Pilsner in Uganda and Tanzania respectively saw 112 per cent growth. Mainstream spirits grew by 22 per cent. The increase in senator beer volumes in Kenya saw the firm’s cash flow from operating activities increase to 32 per cent to KSh27.9 billion
Net sales were recorded at KSh64.3 billion from 64.4 billion shillings in 2015. The flat performance according to the out-going group MD, Charles Ireland was as a result of a decline in its South Sudan business as well as negative foreign exchange in the country. “The collapse of the South Sudanese market has contributed to the decline in the mainstream segment primarily due to the Tusker Lager brand which was and still is a key brand in that market.” EABL’s volumes in South Sudan fell by 60 per cent. South Sudan market accounted for eight per cent of the total revenue with Tusker Lager brand the most popular in the country.
The company made gross earnings of KSh32.2 billion however, expenses and punitive taxes ate into the brewer’s margin. For every KSh100 the company made in profit, the company retained KSh32. Net capital expenditure (CAPEX) spend for the period was Ksh5 billion, covering investment to increase capacity, efficiency and safety as well as returnables in order to meet increased demand for EABL products across the region. Total group net borrowings also decreased by 17 per cent to Ksh25 billion.
The shareholders also approved a final dividend of KSh5.50 per share. The 2016 annual dividend remains unchanged from last year’s KSh7.50 per share. During the same year, EABL also paid a special dividend of KSh4.50 per share.