East African Breweries Limited (EABL) posted a 39 percent drop in net profit to KSh7 billion for the year ended June 2020 with net sales for the second half of the year dropping by 29 percent.
This is from KShs 11.5 billion in the previous year.
The brewer said its second-half decline was due to the impact of the Covid-19 pandemic which saw containment measures implemented across East Africa from late March 2020.
The pandemic impacted EABL’s business performance after three consecutive double-digit halves of growth, with profit for the year declining by 39% to KShs 7 billion from KShs 11.5 billion in the previous year.
Markets Net Sales Highlights for the financial year 2020:
Kenya: Declined 14% versus the prior year. First-half growth of 8% was offset by a second-half decline of 37%, as the partial lockdown from March to June led to the closure of bars and restaurants. Mainstream and value spirits remained resilient and registered 2% growth versus prior year as the category benefitted from a shift of outlet consumption occasions to at-home consumption.
Uganda: Declined 5% versus prior year, as first-half growth of 10% was offset by the impact of a total lockdown from March to June resulting in a 21% decline in sales in the second half.
Tanzania: Grew 14% versus prior year, as first-half growth of 19% slowed down to 10% in the second half as Government restrictions in response to Covid-19 were limited. Double-digit growth in premium and mainstream beer segments and improved spirits performance supported a strong delivery for the financial year.
“In recognition of the uncertainty in the external environment in the face of the Covid-19 pandemic and the need to conserve cash to support the business, the directors do not recommend a final dividend,” said the firm.
It said the interim dividend of KShs 3 per share paid in April 2020 will be the full and final dividend for the year saving the company up to KSh4.7 billion based on last year’s payout of KSh6 per share.