East African Breweries Limited’s (EABL) pretax profit for the year ended June jumped 121% to Ksh 24.02 billion from Ksh 10.86 billion in 2021.
The brewer’s net revenues were up 27% at Ksh 109.4 billion, from Ksh 86 billion. Its earnings per share rose to Ksh 15.00 from Ksh 5.51 a year earlier.
The growth in net revenue was driven by increased price increases following excise tax adjustments in Kenya and Uganda, increased investment and marketing of brands, and continued channel innovation in response to shifts in consumer behaviour.
The brewer operates across East Africa through its subsidiaries: Kenya Breweries Limited (KBL), Uganda Breweries Limited (UBL), Serengeti Breweries Limited (SBL) in Tanzania, UDV (Kenya) Limited, East African Beverages (South Sudan) Limited and East African Maltings Limited (EAML) in Kenya.
Kenya, Uganda, and Tanzania revenues grew 30%, 24%, and 21%, respectively, compared to last year’s period, on easing of COVID-19 restrictions.
"The Group’s net sales were boosted by double-digit growth across all its markets and categories owing to an improved operating environment as outlets reopened, coupled with sustained investment behind marketing and commercial activities." Jane Karuku #EABLResults pic.twitter.com/gC1hsgjpnw
— East African Breweries PLC (@EABL_PLC) July 28, 2022
“This easing contributed to an improved operating environment as outlets reopened and consumer activity picked up,” the company said in a statement.
“Soon after the reopening, the global economy was impacted by the Russia-Ukraine war that has led to accelerated inflation, increased operating costs, and reduced consumer disposable income.”
The company’s board recommended a final dividend payment of Ksh 7.25 per share, compared with no earlier dividend and Ksh 3 a share in the year to end June 2020.
According to Sterling Capital Analysts, the results represent the best financial performance in history, with top and bottom-line items showing YoY solid growth.
“We maintain a strong positive outlook for FY23, mainly driven by growth in bottled beer and mainstream spirits as well as muted competition following the tax wrangles faced by the brewer’s closest competitor, Keroche Breweries.”
“We maintain a buy recommendation on the stock guided by our fair value estimate of Ksh 203.6, representing a 42.1% upside from the closing share price of Ksh 143.25 on Wednesday the 27th of July 2022.”