EABL returns 12pc growth in pre-tax profit

NAIROBI: East African Breweries Ltd (EABL) released its half-year results for the six months period ending December 31, 2014 announcing net sales growth of nine per cent and 12 per cent growth in profit before tax. The results reflected double digit growth in spirits, premium beer and ready-to-drink and improved performance in Tanzania and the export markets.

“This performance for the half-year reflects the strength of our business and our brands. We are pleased to have delivered these results despite the tough and unpredictable business environment. Our response to these challenges, through innovation; focus on cost and increased efficiencies has paid off during this period,” said Group Managing Director, Charles Ireland.

“We continue with our long-term strategy to grow our market share across the region and build our business for future success.”

“Despite currency challenges, our export markets, supported by the establishment of the local depot in Juba, delivered over 100 per cent growth,” noted Ireland.

Tanzania also delivered a robust net sales growth at 17 per cent with particularly strong performance in the emerging beer category driven by Kibo Gold Lager and also supported by an increased focus on spirits and innovation, such as Jebel Coconut and Serengeti Platinum. Net sales in Uganda grew by seven per cent and Kenya delivered a headline net sales growth of three per cent.

CAPITAL EXPENDITURE

EABL also announced significant capital expenditure projects were completed during the period including the new furnace at their Central Glass Industries facility and an effluent treatment plant upgrade in Uganda, with net capital expenditure to Sh2.3 billion in the period under review.

The growth of nine per cent in gross profit was supported by the focus to drive out costs with Sh1.3 billion savings realised from improved raw materials usage, low heavy oil fuel prices and greater production efficiencies. Savings of two per cent in administrative expenses were also realised following last year’s company re-organisation.

There was seven per  cent net reduction in average interest costs with group borrowings increasing by Sh5.5 billion to finance operations and capital expenditure. This was mostly funded by the Commercial paper issued in February last year.

Profit before taxation improved by 12 per cent to Sh6.8 billion. “The quality of these results in a tough environment, reinforce confidence that EABL continues to deliver on its performance ambition,” reckoned Ireland.