• East African Breweries Limited
  • XUGA:EABL KAMPALA/Uganda
  • 8134.00 UGX
  • 0.00 0.00%
  • As of 2017/05/26
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  • About the Company
  • East African Breweries is the group holding company for the largest brewing concern in East Africa. Company subsidiaries are involved in the marketing, manufacture, and sale of drinks, glass containers, malt and barley. Cross-listed in Nairobi
  • East African Breweries Limited is a Kenya-based holding company controlled by Diageo, which is engaged in branded alcohol beverage business.

    The Company is involved in marketing, production and distribution of a collection of brands that range from beer, spirits and adult non-alcoholic drinks. The Company’s segments include Kenya, Uganda, Tanzania and South Sudan.

    The Company is involved in brewing, marketing and selling of drinks, malt and barley. The Company offers various brands, which include Tusker Malt Lager, Tusker Lite, Guinness, Pilsner, White Cap Lager, Allsopps Lager, Balozi Lager, Senator Lager, Bell Lager, Serengeti Premium Lager, Johnnie Walker, Smirnoff, Kenya Cane, Chrome Vodka and Ciroc. The Company exports to Rwanda, Burundi and the great lakes region.

    The Company’s subsidiaries include Kenya Breweries Limited, Uganda Breweries Limited, East African Breweries (Mauritius) Limited, International Distillers Uganda Limited and East African Maltings (Kenya) Limited.

    Website

    Address
    P.O. Box 30161
    Nairobi, 00100
    Kenya
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After a low of $149m in net revenues in 2013, net revenues have grown 7.7% this year slower than last year when they grew at 10%. With this growth they have not recovered to their 5-year peak of £170m
Revenue per year in US $ The higher, the better.
Profits have increased for the last 3 years $47.3m but have not recovered to peak of $51.8m in 2012
Profits per year in US $ The higher, the better.
Profit margins have remained below 30% despite increase in profits indicating a struggle to keep control of costs.
Profit Margin compared to competitors The higher, the better.
Stanbic has maintained return on assets above 3% which is double the global average but is still below the local average.
Management of Assets compared to competitors The higher, the better.
Costs as a percentage of revenue is at 62.82% significantly lower than its peak of 69.85% in 2013. This cost percentage is a lot better than the local average but worse than African average.
Management of Costs compared to competitors The lower, the better.
Cash generation by Stanbic has halved since 2012 but better than 2013 when cash generation was negative due to increased losses in government securities.
Cash Generation compared to competitors The higher, the better.
Assets are currently 90% financed by banks, this may seem high but is similar for both local and African banks. This dependence on debt has reduced slightly over the last few years
Level of Debt compared to competitors The lower, the better.
Stanbic Bank can comfortably cover its immediate debts similar to all local banks. The margin between the liquid assets and current liabilities for Stanbic is lower than other local banks but this has been driven by a drastic increase in customer deposits.
Ability to pay debt compared to competitors The higher, the better.
The available cash (working capital) has increased by 70% over the last 5 years from $112m to $191m. This shows that Stanbic has become more efficient and healthier. This enables that Stanbic to invest more money within the business.
Liquidity/Cash Availability compared to competitors The higher, the better.
Revenues have grown slower than other local banks but the growth in profits has been faster than its local peers. In 2013, Stanbic experienced a 12% drop in profits and 33% drop in revenues, similar to other local banks - this drop in earnings was due to slowdown following the 2011 Ugandan election.
Revenue Growth compared to competitors The higher, the better.
Profit Growth compared to competitors The higher, the better.
Stanbic continues to have pay out the highest level of dividends in Uganda and Africa. Currently Stanbic pays out 3% of its share price but this is half of what it paid out the previous year. This is different from other local banks where dividends have gone back.
Despite Stanbic having high levels of dividend, this drop in dividend yield raises concern about how long this will be sustained.
Return on Equity compared to competitors The higher, the better.
Dividend Yield compared to competitors The higher, the better.
Stanbic Uganda has increased the investment in the business since 2011, and is doing it at the highsest levels both locally and in Africa.
Level of Investment per year in US $ The higher, the better.
Investment Ratio compared to competitors The higher, the better.

Equity turnover at the Nairobi Securities Exchange (NSE) rose to 13 million U.S. dollars on a volume of 73 million shares from the previous session’s 7.9 million worth 1.4 million dollars, boosted by foreign investors trading of Safaricom.

The leading telecom moved a record 42 million shares at an unchanged price of 0.20 dollars. Monday, Safaricom traded 2.1 million shares as foreign investors kept off trading.

Electricity generator KenGen was the second best traded stock after moving 10 million shares at a high of 0.06 dollars.

Kenya Commercial Bank came third with 7.7 million shares that traded at 0.36 dollars, an increase of 3 percent.

At number four was Kenya Power with 4.4 million shares while Mumias Sugar closed the list of the top traded stocks with 3.3 million shares.

Most of the large stocks, however, went down or remained flat therefore pulling down the NSE 20 Share Index. Standard Chartered Bank, Centum Investment and East African Breweries are some of the top 20 stocks that declined.The index declined 8.11 points Tuesday to end the day at 3,221.19 down from 3,229.30 in the previous session. Monday, the index dropped 15 points from a high of 3,244.72. 

The Capital Markets Authority (CMA) has expressed concern over the overwhelming dominance of five of the country’s top firms at the bourse.

The regulator in a new report released yesterday said five companies accounted for two-thirds of the total market capitalisation at the Nairobi Securities Exchange (NSE) in the three months to March, exposing the stock market to concentration risk.

The combined market capitalisation of the stocks of Safaricom, East African Breweries, Kenya Commercial Bank (KCB), Equity Bank and British American Tobacco (BAT), the Capital Markets Soundness Report showed, accounted for about 64 per cent of the market capitalisation.

“The top five companies accounted for between 63.7 per cent and 65 per cent of the market capitalisation, which is a heavy level of concentration on a few counters and exposes the market to concentration risks,” said CMA Chief Executive Paul Muthaura during the the report’s launch in Nairobi.

There are 67 companies listed at the NSE. The Capital Markets Soundness Report is a publication on capital markets stability indicators and industry risks.

EABL’s Group Managing Director, Andrew Cowan says the funds will be used to restructure the balance sheet which entails repayment of short term loans. The listing of the Note on the NSE will provide an avenue for investors who were unable to participate during the offer.

The Note will bear interest at a fixed annual rate of at least 14.17 per cent until maturity on March 28, 2022.

“The success of this issue clearly demonstrates the confidence that EABL has in our market – as one that is well regulated, deep and liquid – well suited to their needs. The ability of issuers such as EABL to continue to come to market and raise greater amounts of capital, also points to the acknowledgement of their quality and the rising investor appetite in our market for debt securities, ” said the Nairobi Securities Exchange CEO Geoffrey Odundo.

The bond had been oversubscribed by 141 per cent with the firm getting Sh8.45 billion from a target of Sh6billion.

EABL Group chairman Charles Muchene (centre) rings the bell during the listing of the EABL’s final series of its corporate bond at the NSE on May 8, 2017. Looking on is Group MD Andrew Cowan (left) and NSE chief executive Geoffrey Odundo.  East African Breweries Limited (EABL) #ticker:EABL has today listed the final series of its corporate bond on the fixed income securities investment segment of the Nairobi Securities Exchange (NSE) #ticker:NSE.

The bond was oversubscribed – recording a 141 per cent subscription and netting Sh8.4 billion against the Sh6 billion on offer.

This is the first corporate bond to trade on the bourse this year, and its listing will provide an avenue for investors who were unable to participate during the offer.

The debt instrument will bear interest at a fixed annual rate of at least 14.17 per cent until maturity on March 28, 2022.

Strained market

EABL Group managing director Andrew Cowan said the issue of the bond had been successful despite considerably constrained liquidity in the money market. “The response that this note has generated demonstrates the confidence that the market has in the EABL brand. 

East African Breweries has hit out at the government over increasingly unpredictable policy and regulatory environment. The giant brewer says this has undermined long-term investment decisions.

“A predictable policy and regulation environment will help firms plan five, ten years out,” EABL chairman Charles Muchene said yesterday in Nairobi. “You have to keep taking into account all stakeholders not necessarily about fixing everything where it is, but creating an environment where changes in future are going to be predictable and people can plan around those changes.”

Kenya’s investment climate as measured by the World Bank’s Ease of Doing Business Index 2017, released last October, improved to position 92 out of 189 countries from 113 previously.

The company, 50.03 per cent controlled by UK’s Diageo, has been a victim of “sin taxes” which have borne the brunt of government’s taxation measures aimed at growing ordinary revenue to meet rising annual expenditure needs.

In the budget statement for financial year 2017-18, Treasury CS Henry Rotich increased excise tax on spirits by 14.29 per cent to Sh200 per litre. 

EABL’s Group Managing Director Andrew Cowan

East African Breweries Ltd has reported a 28 per cent drop in half year net profits as it took a beating from a rise in excise tax and adjusted its earnings from last year’s sale of its glass manufacturing business.

The brewer yesterday said its net profit was Sh5.6 billion in the six months to December 2016, down from the Sh7.7 billion reported in a similar period last year. However, without the one-off Sh2.2 billion sale of Central Glass Industries (CGI), the brewer said its net profit from operating activities rose marginally by 2 per cent, to Sh5.6 billion.

“This financial year has been difficult with a tough external business environment. Excise tax has affected our customers’ ability to afford our products,” EABL Chairman Charles Muchene said at a media briefing yesterday. All its beer brands registered a decline except for emerging spirits.

EABL said revenues from the sale of its premium beer brands that include Guinness and Tusker malt declined by 13 per cent while the Ready to Drink (RTD)’s dipped 11 per cent. RTD include the Smirnoff Ice and Snapp that are targeted at female customers. Its mainstream beer, that include its flagship beer Tusker and Bell, recorded a 7 per cent decline.

It is only the emerging segments and down market alcohol such as Senator Keg and Balozi beer that registered a positive growth, growing by 10 per cent in the half year period. In overall, the decline saw its net sales decline by 6 per cent to Sh35.2billion.

Kenya Breweries Limited has unveiled an online campaign aimed at promoting responsible consumption of alcohol. In the campaign, the firm has partnered with taxi hailing app Uber and aims at dissuading revelers from drinking and driving.

The campaign, dubbed #PartyCentralKenya, is largely targeted at the youth. It leverages heavily on use of digital media, ingeniously roping in ride-hailing apps, celebrated deejay’s, influencers, entertainment outlets, entertainment providers and celebrities.

Part of the campaign will include offering up to 50 rides home on weekends and holidays in partnership with Uber. According to East African Breweries Limited Corporate Affairs Manager, Maryann Nderu, ‎ the move seeks to give young revelers alternatives other than drinking and driving.

Kenya Breweries Limited has unveiled an online campaign aimed at promoting responsible consumption of alcohol. In the campaign, the firm has partnered with taxi hailing app Uber and aims at dissuading revelers from drinking and driving.

East African Breweries Ltd (EABL), controlled by Britain’s Diageo, blamed a jump in Kenyan tax on beer for its flat sales in the six months to Dec. 31 but expects a recovery in the next half-year period.

Chief Executive Andrew Cowan told Reuters on Friday that Kenya should adopt regular, predictable excise tax increases rather than big moves every few years, pointing to a drop in sales of leading brands such as Tusker after Kenya increased excise duty on beer by 43 percent at the end of 2015.

“The boom and bust approach — a 43 percent tax increase — has put the heartbeat of our business, that Tusker brand, under pressure,” Cowan said after a news conference on the previous day’s half-year results.

But he said that consumption is expected to pick up in the next six months as consumers adjust to the new prices in an economy that is growing at about 6 percent a year.

Some 15 million shares worth 2.9 million dollars were traded at the Nairobi Securities Exchange (NSE) Monday, down from 19 million valued at 4.7 million dollars the previous trading day as foreign investors slowed down trading.

Safaricom was the most traded stock moving 11.3 million shares at unchanged price of 0.18 U.S. dollars. The stock attracted the most foreign purchases and sales, but other top buys were Equity Bank, East African Breweries Ltd and the Cooperative Bank.

Oil marketer KenolKobil was the second most active stock as it exchanged 1.3 million shares at 0.12 dollars, a decline of 0.3 percent. The stock, however, was mainly traded by local investors.

Equity Bank, Uchumi Supermarket and Barclays Bank were the other top five traded stocks but they did not trade more than a million shares.

The NSE 20 Share Index went down for the third consecutive trading session to 3,106.21 Monday after peaking at 3,128.44 on March 29 while the All Share Index closed higher at 131.50 from 130.61.

East African Breweries Limited (EABL) leading brands Tusker and Guinness are projected to register sluggish growth in the medium term due to higher taxation, the brewer’s parent company Diageo has said.

John O’Keeffe, Diageo Africa’s president, says a 43 per cent increase in excise duty on beer beginning December 2015 has adversely impacted performance of the two leading brands and that it will take time for them to bounce back.

UK-based global brewer Diageo owns 50.02 per cent of EABL. Excise tax on beer increased to Sh100 per litre from the previous Sh70 per litre, forcing the brewer to adjust its prices upwards with a depressing effect on demand for some of its products.

“While bottled beer and our overall performance in Kenya will improve in the second half, the excise duty increase has put bottled beer out of the reach of many consumers,” Mr O’Keeffe told investors during a conference call.

“It will likely take longer to get Guinness and Tusker back to consistent growth.”

Mr O’Keeffe said the brewer is in open discussions with government stakeholders on various issues including tax.