This archive report was first published on 27 July 2019.
East African Breweries (EABL) has reported a 59% growth in net profit for the financial year ending June 2019, but the brewer is not as optimistic about the current year due to high taxes and exchange rate volatility.
The company posted a profit after tax of Sh11.5 billion in the 12 months to June, growing from a weaker base of Sh7.2 billion in a similar period in 2018. Revenues increased 12.4% to Sh82.5 billion from Sh73.4 billion, buoyed by increased sales of Senator Keg in Kenya and mainstream beer in Uganda and Serengeti Lite in Tanzania.
According to EABL Group CEO Andrew Cowan, the scale of growth in its three markets of Kenya, Uganda, and Tanzania was due to a comparatively weaker performance in the last period, primarily due to political uncertainty in Kenya. However, Cowan noted that the strong growth this year may not be repeated in 2019 due to high taxes and volatility in the exchange rate.
“We are fully conscious that the strong growth we are reporting this year is the result of a comparatively weaker performance in the last period, primarily due to political uncertainty in Kenya,” said Cowan.
Despite the challenges, EABL's liquidity improved with the brewer delivering operating cash flow of Sh22.6 billion compared to Sh13.6 billion. However, the company is undertaking “adult-conversations” with the three governments to address the tax challenges.
“Predictability in excise environment is not only good for us, but even Government can benefit,” said Cowan.
