EABL Supply Chain Director Patrick Kamugi gives a Keg serving to KBL Managing Director Jane Karuku. /FILE East African Breweries Limited (EABL) reported a 47 per cent drop in net profit in the first six months of the year on a high tax regime.
The brewer reported Sh3.8 billion in net earnings in the period under review compared to Sh7.2 billion same period in 2019.
This was primarily excised duty increases, general price inflation and additional costs related to digital tax stamp implementation in Uganda impacted profitability.
Net Sales in the half-year declined three per cent to Sh44.5 billion compared to the same period last year, despite the impact of on-trade restrictions and closures due to Covid-19.
In Kenya, there was a 10 per cent contraction in growth compared to the same period in 2019 due to Covid-19 containment measures that saw continued closure of bars as well as a ban on the sale of alcohol in restaurants in the first quarter.
Although the bars and restaurants were re-opened in the second quarter, operations were impacted by the protocols implemented for the safety of consumers as well as the restrictions of opening hours and the curfew.
However, Uganda delivered net sales growth of 13 per cent compared to the same period last year. Leveraging wholesale channels, enlisting new selling points at mini-shops, home deliveries and e-commerce partnerships, drove this.
Minimum Covid-19 disruption in Tanzania saw the market continue to deliver double-digit growth.
Net sales grew 17 per cent compared to the same period last year driven by broad-based growth across all categories. Beer net sales grew 17 per cent with strong growth from the ongoing success of the Serengeti trademark.
There was a significant decline in beer sales due to Covid-19 restrictions measures especially in Kenya and Uganda, driven by bar closure.
EABL Group MD Jane Karuku said that throughout the Covid-19 crisis, the firm 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. We remain cautiously optimistic about the second half of the year,’’ Karuku.Last month, EABL started the rollout of its Sh558 million ($5 million) East African fund in Kenya to help pubs and bars recover from the Covid-19 disruptions.The support constitutes hygiene kits, permanent sanitizer dispenser units, as well as projection screens for bars to comply […]