The East African Breweries Limited has announced a 16 per cent growth in net sales and operational profits of 10 per cent, an improvement from last years full financial results.
The company’s turnover grew by 16 per cent amounting to a total of 44.9 billion shillings over the last years, 38.7 billion shillings. The profit after tax was nine billion shillings representing a two per cent growth.
The growth is despite the challenging environment that has been characterised by inflation, political unrest in the Northern Africa among other macro economical environment.
The Groups’ Chief Executive and Managing Director, Seni Adetu attributed the positive growth to the company’s role of strengthening its business and investment of key brands.
“Despite the very challenging environment in all fronts, the business recorded encouraging results, with growth of key brands Tusker and Guinness with the uplift of our spirits performance generating a massive contribution,” said Adetu during the investors briefing and release of the groups full year results.
The spirits portfolio grew up 15 per cent group wide with all the business showing different levels of growth in the category.
Noting the company felt insufficient in the last half due to what he termed as the stringent Alcohol Drinks Control Act, Adetu said it did not affect the sales volume of the company after it recorded an eight per cent growth in sales. He however reiterated the need for consumer protection by the Government adding that the company is always a Government and tax compliant.
“While overall consumer confidence was shaken by the introduction of the Alcohol Drinks Control Act,the company nonetheless grew sales, last half we felt insufficient due to the stringent rules that came without consultations, however we are suggesting that the Government should ensure the consumer protection is looked at,” said Adetu.
Adetu also attributed the positive results from the acquisition and investment in integration and systems upgrade of three operational brewery plants in Tanzania saying it has elevated the company’s market in the region.
“The addition of SBL to EABL stable has seen the company opening three plants in Dar-es-salaam, Moshi and and Mwanza and as a result the group is well poised to consolidate its place in the regions alcoholic beverage market,” said Adetu.
EABL acquired 15 per cent of SBL, the second largest breweries group in Tanzania, for 4.9 billion shillings this, according to the groups financial Director Peter Ndegwa, was necessitated by internally generated funds and is scheduled to relinquish its 20 per cent stake in Tanzania Breweries Limited (TBL)by October this year.
“The company is now in its final stages of acquiring the 20 per cent stake in TBL through public offering, a sale which will be completed in October,” said Ndegwa.
The full year results also showed that Uganda delivered a solid performance as a result of the new look bottle, improved product availability and operating efficiencies with Bell larger reinforcing its leadership position in the nation’s market.
In capacity enhancement, Capex investments has seen the installation of a 50,000 bottle per hour capacity packaging line at Uganda Breweries Limited while EABL invested in a new water storage facility with a capacity of 4,000 cubic meters and upgraded its power supply line to 66 from 11 kilo volts to reduce power bills and optimize out put.
At the same time the Groups’ Board of Directors recommended a final dividend of 6.25 shillings and a 2.50 shillings interim dividend amounting to a total dividend of 8.75 shillings per share.