The East African Breweries Limited (EABL) has reported a remarkable 16 percent increase in net sales, reaching Kes66.5 billion in the six months leading up to December 2023.
This strong performance defies prevailing market conditions marked by reduced consumer spending power owing to persistent inflationary pressures across its key markets in East Africa.
EABL’s performance, outlined in their half-year financial results, reveals a two percent growth in Group volumes, underscoring a resilient consumer demand and effective commercial strategies for the brewer.
The positive performance reflected across all key markets, with Kenya experiencing a 10 percent growth, Uganda soaring at 31 percent, and Tanzania showing a solid nine percent increase in net sales during the period.
Furthermore, the beer and spirits categories demonstrated robust growth rates of 18 percent and 13 percent, respectively.
EABL’s Group managing director and CEO, Jane Karuku, attributed this strong performance to strategic pricing initiatives, a diverse product portfolio, and effective commercial activities undertaken during the first half of the fiscal year.
“We continue to emphasize consumer-based innovation to ensure our customers are happy,” noted Ms Karuku.
However, amidst the positive sales growth, net earnings for EABL dipped by 22 percent to Kes6.8 billion compared to the same period last year. This decline was primarily attributed to Kes2.1 billion in forex losses as the Kenyan Shilling weakened against the US dollar, significantly driving up input costs.
Notable contributors to the high cost of doing business were a 10 percent increase in excise tax on glass, a 5 percent rise in sugar taxes, and a substantial 39 percent increase in fuel costs.
EABL’s Chief Finance Officer, Risper Ohaga, pointed out that the company is grappling with substantial costs associated with importing approximately 70 percent of its ethanol requirements.
Despite these challenges, Ms. Karuku remains optimistic about EABL’s business in the second half. She highlighted the company’s commitment to brand-building, cultural enrichment, and innovative practices to drive growth.
Looking ahead, Karuku outlined the priorities for the second half of the fiscal year, highlighting a consumer-centric approach, brilliant execution to adapt to market dynamism, cost efficiency, margin growth, and continued smart investments in brands and business.
“We continued to deliver against our Environmental, Social and Governance (ESG) strategy, yielding positive results around water efficiency and carbon footprint,” noted Ms Karuku.
Last year, EABL reported significant progress toward its goal of achieving net-zero emissions by 2030. The company rolled out biomass steam plants in its Uganda and Kenya factories, elevating the use of renewable energy to 64.86 percent, a substantial increase from 25.8 percent in 2022.
EABL stated that its four biomass boilers in Kisumu and Tusker Plants signify a total investment of Kes4.6 billion, while the biomass plant in Uganda Breweries Limited represents a total investment of Kes1.6 billion.