The East African Breweries Limited (EABL) could not shrug off off effects of Coronavirus pandemic in second half of the year ending 31st December 2020 as net profits declined 47%. The brewer posted half year profit after tax of Kshs. 3.8 billion during the period when compared to Kshs. 7.2 billion it earned during the same period in 2019.
EABL Group Chief Executive Officer Jane Karuku attributes the decline to one-off tax provision, excise duty increases, general price inflation and additional costs related to digital tax stamp implementation in Uganda which impacted profitability.
The second half performance is however an improvement when compared to first half of the year ending June 30 th when the group reported profit loss of Kshs. 0.2 billion on account of tougher COVID-19 containment measures which impacted sales as bars remained closed and restaurants were prohibited from selling alcohol.
“Throughout the Covid-19 crisis we have ensured a dynamic and close connection with the consumer. Our greatest assets remain our brands and we have been able to adapt to the changing consumer needs while providing safe channels through which they have continued to enjoy our products,” said Karuku.
Net sales declined by 3% to Kshs. 44.5 billion for the half-year ended December 2020 compared to the same period last year, although it was a 53% growth compared to the previous half.
Even after the easing the health measures in second half of 2020, EABL says protocols implemented for safety of consumers as well as restrictions of opening hours and curfew, could not sustain sales which declined by 10%.
However, net sales in Uganda grew 13% compared to the same period in 2019, driven by wholesale channels, new selling points and home deliveries through online orders.
Tanzania sales which grew 17% were largely driven by road-based growth across all categories as beer net sales also grew 17% with strong growth from the ongoing success of the Serengeti trademark.
“EABL’s spirits net sales grew by 10%, partially offset by beer net sales decline of 8% against the same period last year. Decline in beer sales was primarily driven by Senator Keg due to Covid-19 related countrywide bar closures in Kenya.”
EABL unveiled a Kshs 558 million East African Fund in Kenya to help pubs and bars recover from the Covid-19 disruptions and prop up sales.
“We are committed to the safety and comfort of our customers and supporting the trade at this critical time when they are […]