The East African Breweries Plc (EABL) has doubled its profit-after tax for the financial year to June 2022 after enjoying strong growth in sales following the easing of Covid-19 restrictions.
The brewer has earned a net profit of Sh15.6 billion during the period, a 124 per cent growth from the Sh7 billion it recorded in the year to June last year.
EABL made gross sales worth Sh193 billion during the financial year up from Sh152 billion in the previous year driven by increased consumption of alcohol following the reopening of the economy.
The company was heavily hit by the pandemic which saw the government impose a dusk-to-dawn curfew that run for over a year and a half before it was lifted by President Uhuru Kenyatta in October last year.
The brewer’s earnings were also boosted by a reduction in other expenses which fell by nearly Sh2 billion from Sh5.9 billion to Sh4 billion.
Net sales grew 27 per cent to Sh109.4 billion as consumption of both beer and spirits recovered, with the company’s subsidiary recording the highest revenue growth during the year (30 per cent), while its units in Uganda and Tanzania grew by 24 per cent and 21 per cent respectively.
EABL Chief Executive Jane Karuku said the results reflect the strength of the company’s portfolio and its ability to respond to emerging market trends and needs.
She, however, raised concern over the ongoing volatility amid high inflation, shortage of foreign currency, volatility of the Kenyan shilling and uncertainty over the outcome of the upcoming August 9 General Election.
The company has also raised concern over the high excise duty imposed by the government arguing that the tax is punitive and will inhibit the alcohol sector and stimulate the growth in consumption of illicit liquor.
The National Treasury this month imposed fresh excise duty taxes on alcohol through the Finance Act, 2022 pushing up the cost of the drinks.
The Treasury raised excise duty on beer from Sh121.85 per litre to Sh134, that on wine to Sh229 per litre up from Sh208.2 and spirits to Sh335.3 per litre up from Sh278.7.
“The excise regime in Kenya is becoming increasingly aggressive and unpredictable, creating uncertainty for businesses like ours. The significant tax increases impact the affordability of quality alcohol and aid the uptake of illicit unsafe brews ad contraband liquor, reversing the gains made in combating unregulated alcohol,” said the firm in a statement.
EABL has declared a final dividend of Sh7.25 per share following the payment of an interim dividend of Sh3.75 bringing the total dividend payment for the year to Sh11 per share.
