East African Breweries Limited (EABL) has posted $76.6 million in its half profit to December last year from $33.11 million booked in a similar period in 2020, driven by revenue growth in Kenya, following the lifting of the curfew and re-opening of bars in October last year.
EABL said that its net sales in Kenya improved by 27 percent, beating Uganda and Tanzania, in which it recorded 18 percent and 15 percent sales rise respectively.
This comes after Kenya lifted the dusk to dawn curfew in October last year, after being in effect since March 2020, marking the resumption to full operating hours by bars, restaurants, and eateries.
“The Group’s profit after tax grew to $76.6 million, primarily driven by the higher net sales, margin expansion, robust cost management and the re-opening of bars in Kenya in the second quarter,” EABL said in the statement.
EABL Group chief executive Jane Karuku said the re-opening of bars in the second quarter boosted its total sales, which jumped to $479.72 million, or 23 percent, for the period from $384.4 million a year earlier.
“EABL’s performance for the half-year ended 31 December 2021 demonstrates a strong recovery from the impact of the Covid-19 pandemic that affected the last two financial years,” said the brewer.
The brewer attributed the 23 percent growth to investment behind brands and innovation in the route to market in response to consumer behaviour shifts.
“Additionally, the continued investment in capacity of $54.17 million enabled EABL to rapidly respond to the increased consumer demand.
Following the 131 percent increase in profit, the company has set a temporary dividend payout of $0.033 per share. EABL froze payouts in the first half of the 2021 financial year, citing uncertainty due to Covid-19 restrictions, after registering a one percent drop in profits.
EABL has also reported a 51 percent increase in physical asset acquisition in support of future growth, amidst uncertainty of the future market dynamics in the region.
“The trading environment remains uncertain with the lingering socio-economic impact of the pandemic, excise tax volatility, and the upcoming electioneering period in Kenya. However, we are cautiously optimistic that the regional economies will continue the recovery path, sustaining growth momentum across East Africa,” EABL CEO Jane Karuku said.
EABL registered a higher sales improvement in Uganda, which had more stringent Covid-19 restrictions in that period than in Tanzania. The firm attributed this to the success of their home delivery system.
In Uganda, the net sales grew 18 percent driven by the market’s agile response to the shifting consumer trends as well as strategic pricing decisions.
“Uganda’s innovative channel delivery model ensured outstanding last-mile success, guaranteeing growth. In Tanzania, the net sales grew 15 percent, with beer and spirits registering double-digit growth. Growth momentum continued through increased strategic investment behind brands and innovations,” the firm said.
Ms Karuku also said that the brewer will continue to focus on its 10-year sustainability programme, a three-pronged agenda aimed at promoting positive drinking, championing diversity and inclusion and pioneering grain to glass sustainability across its value chain.
“Our regional effort to support the hospitality sector through the pandemic has gathered pace, with 60 percent of the Raise the Bar fund ($4.98 million) already spent. This fund is enabling physical and digital support to bars welcoming customers back after lockdowns,” she said, adding that EABL has also complemented government efforts across the region in driving national programmes to combat the impact of Covid-19, vaccinating its employees, their families, and consumers.
The brewers CEO remained positive about its 2022 outlook, especially in its biggest market -Kenya, noting that the trading environment remains uncertain with the lingering socio-economic impact of the pandemic, excise tax volatility, and the upcoming electioneering period in Kenya.
“However, we are cautiously optimistic that the regional economies will continue on the recovery path, sustaining growth momentum across East Africa,” she said.