EABL cuts dividend as revenue drops 22pc to Sh6.7 billion

EABL chief government Jane Karuku. FILE PHOTO | NMG

East African Breweries Plc (EABL) reduce its interim dividend by 73.3 % to Sh1 per share after posting decrease earnings within the half 12 months to December 2023.

The corporate had paid an interim dividend of Sh3.75 per share a 12 months earlier. The brand new dividend might be paid on April 26 to shareholders on report as of February 16.

EABL’s dividend has been trending down for the reason that 12 months ended June 2022 when it made a peak distribution of Sh11 per share after registering a powerful restoration from the affect of the Covid-19 pandemic.

The brewer’s web revenue dropped 22 % to Sh6.7 billion within the assessment interval as excessive working prices, elevated debt service bills and weakening of the shilling eroded the advantages of elevated gross sales.

The corporate had posted a web revenue of Sh8.7 billion the 12 months earlier than. EABL’s web income –after oblique taxes— grew to Sh66.5 billion from Sh57.2 billion on what it attributed to improved gross sales throughout its markets.

“EABL Group’s volumes elevated by 2 %, lifted by resilient shopper demand as markets leveraged a powerful and increasing portfolio with sensible industrial execution,” the corporate mentioned in an announcement.

“The Group reported web gross sales progress throughout the three markets: Kenya at 10 per cent, Uganda at 31 at per cent and Tanzania at 9 %. Moreover, beer and spirits classes grew at 18 % and 13 % respectively.”

The upper working prices and the devaluation of the native foreign money nonetheless cancelled the gross sales achieve, resulting in the decline in web earnings.

EABL booked a international alternate lack of Sh2.3 billion because of the weakening of the Kenya shilling.

The foreign money loss elevated from Sh209 million the 12 months earlier than.

The corporate’s web finance prices additionally jumped to Sh3.9 billion from Sh2.3 billion regardless of a decline in borrowings, underlining the affect of rising rates of interest.

“We have now achieved a resilient set of ends in the half-year interval. Our nice model constructing, sensible industrial execution, in addition to shopper perception led innovation, has allowed us to proceed our income progress momentum,” EABL’s chief government Jane Karuku mentioned in an announcement.

“Nonetheless, our backside line has been impacted by elevated prices of inputs, foreign money devaluation and rising rates of interest.”

EABL’s price of gross sales surged to Sh37 billion from Sh30.7 billion, contributing to the lowered margins. The corporate mentioned its bills elevated amid the overall excessive inflation within the economic system.

Ms Karuku mentioned the corporate will on this second half concentrate on chopping prices to develop margins apart from making selective investments in its manufacturers and companies.

EABL had already spent Sh6.1 billion on advertising within the assessment interval when its microbrewery, constructed at a value of Sh1.2 billion, additionally began manufacturing.

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