Rising input costs, multiple excise tax increases and currency depreciation saw East African Breweries PLC (EABL) drop by 12 per cent in the year ended June 30.
The firm's financial results released Thursday shows the brewer's net earnings shrunk to Sh12 billion despite posting a net sale of Sh109 billion, similar to what it recorded the previous year.
EABL’s Group volumes were down seven percent year-on-year, as sales were impacted by sluggish consumer spending as effects of the tough macroeconomic environment and regulatory disruptions took a toll on depletions.
Net sales in Kenya declined four percent with excise tax escalation impacting the price-sensitive mainstream segment.
The trading environment in Kenya also impacted performance, particularly trade distractions leading to county-led bar closures. However, the premium spirits segment proved resilient, registering double-digit growth.
Uganda continued its encouraging half-year growth trajectory, closing at 17 per cent growth aided by pricing benefits and modest volume growth.
Tanzania on the other hand registered a modest growth of one percentage point as the market continues to adjust to price increases taken earlier in the year.
Consequently, the board halved a final dividend payout to Sh1.75 per share, bringing the total dividend for the year to Sh5.50 per share.
EABL Group managing director Jane Karuku said the firm remained resilient despite the macroeconomic headwinds - including global inflation and geopolitical disruptions - which disproportionately raised costs and depressed consumer spending
" Amidst these challenges, we maintained our strategic focus on delivering value to our consumers and all our stakeholders through execution excellence, and operational efficiency,” Karuku said.
Even so, she says the company remains optimistic about the growth prospects for our business.
"We continue to invest in our advantaged portfolio of brands and insight-led innovations to meet the ever-evolving needs of our consumers,'' Karuku said.
EABL continued to reap from smart investment behind brands, digital and consumer experiences, investing Sh12.9 billion in capital expenditure during the year.
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