EABL after-tax profit hits seven-year low on higher costs, taxes

EABL Ruaraka

An EABL employee checks on beer quality before labelling at the company's plant in Ruaraka, Nairobi. 

Photo credit: File | Simon Maina | AFP

EABL has reported another drop in its net profit, with a 1 per cent decline to Sh6.96 billion for the year ended June 2021, marking a seven-year low for the company.

The brewer cited higher costs, taxes and negative foreign exchange impact amid a tough environment occasioned by Covid-19 for the performance.

"EABL’s performance was delivered on the back of a tough operating environment...The pandemic continued to impact the business negatively across East Africa due to the restrictions in Kenya and Uganda and the general decline in disposable incomes in the region," the firm said in a statement.

"The company responded to the new realities by continuing to invest behind the brands (leveraging changing consumer behaviour and channel shifts), expanding capacity and sustaining productivity initiatives to manage cost base to ensure we emerge stronger," it added. 

The Sh6.96 billion after-tax profit is a slight drop from Sh7.02 billion posted in June 2020, and is the lowest since 2014 when it posted net profit of Sh6.85 billion.

However, it is far below the Sh11.5 billion it had reported in June 2019, before the onset of the Covid-19 pandemic.

But the brewer reports that its revenues to June 2021 grew by 15 per cent to Sh86 billion, up from Sh74.9 billion last year, as Uganda and Tanzania businesses recorded better performance than Kenya Breweries Limited (KBL).

While KBL registered a 10 per cent year-on-year revenue growth, Tanzania’s Serengeti Breweries Limited (SBL) grew by 15 per cent, while Uganda Breweries Limited (UBL) grew more than the Kenyan market at 33 per cent. 

The brewer said beers and spirits recorded double-digit growths in the neighbouring countries. 

EABL Group managing director Jane Karuku said the Covid-19 pandemic had impacted the business throughout the year, which had reduced disposable incomes for consumers.

The MD said the company is now focused on growing its revenues as the recovery journey takes shape, even as she acknowledged that uncertainty caused by the pandemic would continue.

The announcement comes as Kenya continues to effect strict containment measures to prevent spread of Covid-19, most of which have affected alcohol businesses across the country.