BOTTOMS UP

Keg, whiskey sales drive up EABL's net profit

In Summary

• Senator keg sales in the country were up 32 per cent while net sales in bottled beer recovered to grow by three per cent.

• The sale of spirits and scotch grew 30 and 46 per cent respectively. 

KBL supply chain director Patrick Kamugi pours KBL managing director Jane Karuku a drink of the first sample of Senator Keg produced at the newly refurbished Kisumu Brewery during a test-tasting session
KBL supply chain director Patrick Kamugi pours KBL managing director Jane Karuku a drink of the first sample of Senator Keg produced at the newly refurbished Kisumu Brewery during a test-tasting session
Image: MAURICE ALAL

Low-income earners have upped their Senator keg intake in the past year, with more disposable income among customers of the low-priced beer.

In its annual financial statement, EABL reported Senator keg sales in the country were up 32 per cent while net sales in bottled beer recovered to grow by three per cent.

According to EABL, the rise in consumption of the low-priced beer sprang back in tandem with the country’s economic recovery.

During the last half of 2017 and the first half of 2018, Kenya’s volume performance for keg was dipped 22 per cent as the country reeled in from the effects of a prolonged electioneering period. 

This, coupled with a 30 and 46 per cent growth is the sale of spirits and scotch respectively resulted in a 13 per cent growth in EABL’s Kenya sales.

“This was driven by the fact that Kenyans want to drink better. They are becoming globalized in terms of their lifestyle,” KBL managing director Jane Karuku said.

While announcing the firm’s results yesterday, EABL Group CEO Andrew Cowan said the good performance was driven by leveraging on a more positive external environment compared to the same period last year.

“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,” he said.

For the year under review, the beer maker reported a 12 per cent growth in net revenue to Sh82.5 billion.

The firm reported a 57.34 per cent (Sh4.2 billion) increase in net profit to Sh11.5 billion for the year ending June 30th. This represents an increase from Sh7.3 billion for the same period last year.

EABL’s cash position also improved, delivering an operating cash flow of Sh22.6 billion compared to Sh13.6 billion last year.

As a result, the Board of Directors has recommended a final dividend of Sh6.00 per share, resulting in a total dividend of Sh8.50 per share, an increase from Sh7.50 per share a year ago.

The pace of the beer makers project management at the construction of the Kisumu brewery saved EABL Sh1 billion. The project was initially expected to cost Sh15 billion with Sh12.5 billion from its free cash flow and the balance funded through a loan from Stanbic Bank in Kenya and their parent company.

“We’ve completed the building of Kisumu ahead of time that’s why the original investment of Sh15 billion ended up being a Sh14 billion spend,” Cowan said.

EABL has started producing Senator Keg, giving a lifeline to 15,000 additional sorghum farmers delivering the crop to the brewery.

The new lot brings to 60,000, the total number of farmers now supplying sorghum, millet and cassava to EABL across the region.