EABL Half Year Profit Remains at sh8.7 bn as Costs Rise
By MaryAnne Musilo,
The high cost of living and steep taxation in Kenya saw East African Breweries Limited record a flat growth in earnings for the half year ended December 31, 2022.
The Group posted a Sh8.7billion net profit in the period under review a marginal decline from Sh8.73 billion posted in the same period in 2021.
During the period, Group volumes declined by 4 percent year-on-year, as price increases impacted consumer purchasing patterns, mainly in mainstream and value segments.
Further, net sales grew at a slow 4 per cent to Sh57.3 billion from Sh54.8billion in HY 2021.
EABL faced an exceptionally challenging time related to macro-economic volatility and drought situation across East Africa, global inflation, and geo-political disruptions related to the Russia/Ukraine war. This was further compounded by excise related price increases in Kenya, effected in July and October, which significantly affected consumption of our brands,” said EABL Group Managing Director & CEO, Jane Karuku.
In July 2022, Kenya’s excise tax for beer and spirits came to effect following the 2022/23 Budget, increasing by 10 per cent and 20 per cent, respectively.
In October 2022, beer and spirits consumers were hit by a further 6.3 per cent excise tax increase in the form of annual inflationary adjustment.
These increases came on the back of an annual upward excise adjustment in 2021, leading to a compounded annual excise tax increase of 23 per cent for beer and 34 per cent for spirits.
As a result, EABL’s net sales growth regressed by 1 percent in Kenya, its largest market, while Uganda and Tanzania grew by 19 per cent and 11 percent, respectively.
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