Taxes, forex losses see EABL profit remain flat at Sh6.96bn
High operating costs including taxes and forex losses have seen alcohol maker EABL full year earnings to June 2021 slip by one per cent to Kes 6.96 billion from Kes 7.02 billion last year.
In the year, however, East African Breweries Ltd (EABL) saw turnaround in sales with revenues going up by 15 per cent to Kes 86 billion with the regional firm attributing the rebound to investments in e-commerce, home delivery and take home trade.
For 18 months and still counting, the hospitality industry in Kenya has been hit hard by the pandemic pushing thousands of bars and restaurants out of business.
“Through fiscal 2021, 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 company said in a statement.
To keep sales moving, EABL has been encouraging other modes of product delivery to customers such as online shops that offer home delivery services.
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“We are seeing significant consumer, chamber and category shifts. People are for instance consuming in smaller groups and consumption at home due to ongoing restrictions,” noted EABL chief executive officer Jane Karuku.
In the year, EABL biggest rebound in sales at 33 per cent came from neigbouring Uganda market while revenues in Kenya and Tanzania have improved by 10 and 15 per cent with beer and spirits sales leading the way of recovery.
The company extended their beer in can portfolio and one way bottles to help support the off-trade business, opening a new stream of revenue.
Consumption of bottled beer grew by 12 per cent, premium spirits 21 per cent while Senator keg rose by six per cent in the period under review.
In early June, the company said it is budgeting Kes 1 billion to purchase a new spirits line as well as expanding the storage capacity at its sister company, UDV Kenya, to meet the rising market demand.
Spirits sales have benefited from travel restrictions as consumers register more consumption from home, noted CEO Jane Karuku.
Nevertheless, EABL says the operating environment remains volatile with its board bypassing the chance to recommend a final dividend to shareholders.
