This archive report was first published on 30 July 2019.
On June 30, East African Breweries Ltd (EABL) announced a significant increase in its net earnings, with a 57% growth over the 12 months period. This impressive growth was largely attributed to the strong performances of its regional subsidiaries in Tanzania and Uganda.
According to the firm's audited financial statements, the recovery in the consumption of both beer and spirits across the region contributed to the company's success. The Nairobi Securities Exchange (NSE) listed brewer made Ksh11.5 billion ($115 million) in net profit, a substantial increase from last year's Ksh7.3 billion ($73 million).
The strong performance was underpinned by the recovery in the consumption of both beer and spirits across the region. The firm's total revenues grew by 12% to Ksh82.54 billion ($825.4 million) from Ksh73.45 billion ($734.5 million) over the same period.
Notably, the brewer's sales revenues in Uganda and Tanzania grew by eight per cent and 20 per cent respectively, while that in Kenya grew by 13 per cent. The Ugandan and Tanzanian subsidiaries contributed 15 per cent and 12 per cent respectively to EABL's bottom-line, with a huge share of the profit (73 per cent) realized from the Kenyan operations.
As a result of the increased earnings, the firm declared a total dividend of Ksh8.50 ($0.08) per share for the shareholders, up from last year's Ksh7.50 ($0.07) per share. During the year, EABL spent Ksh 11.7 billion ($117 million) in capital expenditure across the East African region, with plans to invest more to boost capacity, improve production efficiencies, and minimize negative impact on the environment.
On July 29, the firm's stock on the NSE increased two per cent to Ksh207.75 ($2.07) per share from the previous day's price of Ksh203.25 ($2.03) per share.
