E-Malt.com News article: 2302

Kenyan beer maker, East African Breweries Limited has announced their Half Year Financial Results for the period ending December 2003. The Group, which consists of Kenya Breweries, Uganda Breweries, Kenya Maltings, Central Glass Industries and UDV Kenya performed exceedingly well. The Group recorded a Net Sales turnover of Kshs 8.4 billion for the half year, an increase of 5% from similar period last year.

Profit before tax for the Group rose to Ksh 3.7 billion, up from Ksh 2.38bn an increase of 56% from a similar period last year. The EABL Board of directors have recommended an interim divided of Ksh 3.75 per share. This represents an increase of 25% over last year. The Group’s Basic Earnings per Share rose to Kshs 19.75 up from last year’s figure of Ksh 13.09 an increase of 51%.

Mr. Gerald Mahinda, EABL Group Managing Director noted that the benefits of the group’s major restructuring in December 2002 continued to flow through as expected, to the financial results.

“EABL has benefited from the strategic initiatives that we have undertaken in the previous years. These initiatives have all led to the step-change in our profit growth this year,” stated Mr. Mahinda.

The Group is currently ranked as one of the Top performing companies on both Nairobi and Kampala Stock Exchanges.

Kenya Breweries recently invested Ksh 1.4 billion (USD$19mill) into a state of the art bottling line, an initiative that was aimed at enhancing brand quality and production efficiencies. The Group intends to spend a further US$15m on capital expenditure in the next financial year.

“We are committed to achieving the highest level of excellence in our supply chain. We have consistently produced and marketed international award winning brands and we will continue to focus on our people, brand quality and product innovation,” stated Mr. Mahinda.

On the Group’s Social Agenda, Mr. Mahinda stressed that the Group was committed to improving the lives of people in the communities in which it operated. “Our commitment to high standard of corporate behavior continues to play an integral part of our business’, Mr. Mahinda stated. “We are proud of our history of social responsibility achievement, and believe that we have the capacity to extend the reach of our corporate citizenship activities.’ said Mr. Mahinda.

He stressed that the Group currently focuses on four core areas – health, education, access to clean water and alcohol education. “We plan to announce new projects in each of these over the coming period. We will also be intensifying our efforts on the promotion of responsible drinking”, said Mr. Mahinda.

EAB, 50%-owned by Diageo, has suffered in its home market of Kenya, where homemade beers are being offered in dens for a fraction of the price of branded beer. Malted beer is also hit by taxes of 85% in the country, compared to 60% in Uganda and 33% in Tanzania, where the brewer also operates. The company is currently in talks with the government about the situation, according to Reuters.

The company expects volumes to be flat in 2003/4, when it expects to sell 2.23m hectolitres compared with 2.28m the previous year and 2.38m in 2001/2.

In February 2003, EABL posted pre-tax profits of 2.28 billion shillings ($29.8m) for 2002


10 March, 2004