•Shareholders Recommended interim dividend at Sh3.75 per share, similar to same period last year.
•The firm invested capital expenditure of Sh5.5 billion during period under review, to leverage future growth.
East African Breweries PLC (EABL) has reported a four percent growth in its net sales to record Sh57.3 billion for the half year ended 31 December 2022.
During this period, Group volumes declined by four percent year-on-year, as price increases impacted consumer purchasing patterns, mainly in mainstream and value segments.
The drop has been attributed to the imposition of excise tax for beer and spirits mid last year, and a tough macro-economic volatility and drought situation across East Africa, global inflation, and geo-political disruptions related to the Russia/Ukraine war.
“This was further compounded by excise-related price increases in Kenya, effected in July and October, which significantly affected consumption of our brands,” said EABL Group Managing Director & CEO, Jane Karuku.
In July 2022, Kenya’s excise tax for beer and spirits came to effect following the 2022/23 Budget, increasing by 10 percent and 20 percent, respectively.
In October 2022, beer and spirits consumers were hit by a further 6.3 percent excise tax increase in the form of annual inflationary adjustment.
These increases came on the back of an annual upward excise adjustment in 2021, leading to a compounded annual excise tax increase of 23 percent for beer and 34 percent for spirits.
Consequently, beer volumes were down 13 percent in Kenya, with performance further undermined by a re- emergence of illicit alcohol during the period under review.
As a result, EABL’s net sales growth regressed by 1 percent in Kenya, its largest market, while Uganda and Tanzania grew by 19 percent and 11 percent, respectively.
The Group’s slower top-line growth resulted to Sh8.7 billion in profit, which was flat compared to the same period last year.
The EABL Board has recommended an interim dividend of Sh 3.75 per share, similar to the same period last year.
“We will continue executing our strategy to navigate the prevailing macroeconomic volatility, leveraging our portfolio of extraordinary brands, smart investment, fuelled by our culture of everyday efficiency” said Karuku.
During the period under review, the business continued to invest smartly behind brands, digital capabilities and consumer experiences.
EABL also invested Sh5.5 billion in capital expenditure to extend production capacity and Environmental, Social and Governance (ESG) initiatives.