East African Breweries Ltd registered a 33 per cent growth in its second half-year net earnings to hit $64.97 million.
The brewer says its improved performance in the six months to December 2018 was a result of a stable operating environment in the region, supported by investment in its brands.
“Gross proﬁt improved by 20 per cent, and proﬁt after tax grew 33 per cent, driven by strong top-line performance, positive product mix, cost efﬁciencies driven through the productivity initiatives and reduced interest charges,” EABL said.
The company’s revenues rose 13 per cent to $409.27 million, driven by strong performance by spirits, beer and Senator Keg across the region.
In Kenya and Uganda, net sales went up by 12 per cent, and in Tanzania they increased by 26 per cent.
The beer segment grew 12 per cent, driven by Senator Keg’s performance in Kenya, an improved mix in Uganda and continued strong delivery of Serengeti in Tanzania.
The spirits segment grew 16 per cent, on the back of a strong performance by Scotch whiskey as well as “vibrant innovations.”
“We have made progress against our performance ambition, delivering broad-based growth across regions and categories. There is still a lot more to do across all our markets, but this half-year performance proves that we can get there if we continue to focus on strategic execution across our business,” said group chief executive officer Andrew Cowan.
In Kenya, the beer segment went up 35 per cent as a result of increased distribution, commercial initiatives as well as the rejuvenation of the Senator Keg brand through national campaigns. Net sales for spirits grew 17 per cent.
Increased investments in spirits helped support the launch of local innovations like Captain Morgan Gold.
Uganda’s net beer sales went up 11 per cent, and spirits net sales grew 16 per cent.
Growth in the Tanzanian market was 26 per cent, with the Serengeti trademark up 65 per cent, supported by the Serengeti Lite promotion and the national football team’s sponsorship.
“With our new brewery set to become fully operational soon, we expect to provide more and better drinking options, expanding our beverage alcohol universe farther,” Mr Cowan said.
“Our strategy, which aims to deliver a vibrant mainstream beer, explode our mainstream spirits, win in premium and recruit from illicit alcohol, has given all our businesses a broad and solid foundation from which to deliver a more consistent performance in the future.”
The company plans to commission the Kisumu brewery in which it has already invested $49.23 million, when it opens in 18 to 19 months
The Nairobi Securities Exchange-listed brewer, which is controlled by Britain’s Diageo, improved its cash and cash equivalents to $86.14 million at the end of the first half of last year, up from $45.1 million in December 2017.
This, the firm said, was due to its focus on working capital management, which resulted in a reduction of net debt.