EABL profit declines to Sh7b due COVID-19 restrictions
By Fredrick Obura | July 29th 2020
The East African Breweries Limited (EABL) has recorded a 9 per cent decline in net sales for the financial year ended 30 June 2020, as the first half growth of 10 per cent was offset by a 29 per cent decline in the second half.
The company attributed the second half decline 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 per cent to Sh7 billion from Sh11.5 billion in the previous year.
“During this unwelcome pandemic, our top priority has been to safeguard the health and well-being of our people and support our communities, while taking necessary action to protect our business. Across the markets we have tracked changes in consumer behaviour and repurposed our execution plans in trade to continue serving our consumers where safe and possible to do so,” said EABL Group MD and CEO, Andrew Cowan.
Cowan said EABL focussed on managing working capital tightly in the last quarter, reducing discretionary expenditure and reallocating resources such as advertising and promotion (A&P) spend to new and emerging channels to serve consumers safely.
Given the pandemic’s impact on bar owners across East Africa, EABL is committing Shs 500 million to support the recovery of on-trade outlets in Nairobi, Kampala, and Dar es Salam as part of Diageo’s $100 million ‘Raising the Bar’ global fund. The funding will be used to support the implementation of hygiene measures, provision of practical equipment, and provision of free digital support and training to enable outlets to transform how consumers will be served when bars reopen.
“Going forward, our market teams have put in place robust plans to help us emerge stronger from this crisis once the measures are eased across our markets. We will continue to execute with discipline and invest prudently to ensure we are strongly positioned for a recovery in consumer demand,” Mr. Cowan said.
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 Board of Directors does not recommend a final dividend. Consequently, the interim dividend of Sh3 per share paid in April 2020 will be the full and final dividend for the year.
Covid 19 Time Series
Chimphondah: The man putting Shelter Afrique’s house in order
- Gideon and ICT committee laud Konza City's project progress
- Court bars CBK's migration of banks to foreign payment firm
- Forex reserves drop by Sh27b after debt repayment to China
- KQ gets nod to evict rival airline 748 from JKIA property
- Retracing the rise of Nairobi bourse from colonial-era free fall