East African Breweries Limited (EABL) has recorded a 39% decline in profits to KSh7 billion for the year ended 30 June 2020 compared to KSh 11.5 billion recorded in 2019.
The company says that the strong performance witnessed in the first half was offset by the impact of COVID19 as widespread restrictions across East Africa hampered sales. In this case, EABL financials show that the H1 net sales growth of 10 percent was offset by a 29 percent decline in the second half (H2).
|Markets||Net Sales||H1 sales||H2 sales|
|Kenya||-14% decline||+8% growth||-37% decline|
|Uganda||-5% decline||+10% growth||–21% decline|
|Tanzania||+14% growth||+19% growth||+10% growth|
|EABL||–9% decline||+10% growth||–29% decline|
Governments in Kenya and Uganda enforced travel restrictions, outlet closures, and social distancing measures that saw sales decline contributing the biggest hit to EABL profits.
In this case, net sales in Kenya declined 14 percent for the year, despite an 8 percent growth in the first half. EABL says that the partial lockdown between March and June saw bars and restaurants closed. However, the shift in consumption from outlet consumption to at-home consumption saw Kenya’s mainstream and value spirits register a 2 percent growth YoY.
On the other hand, Uganda’s net sales declined 5 percent, offset by H2 decline of 21 percent despite an impressive 10 percent growth in H1. A total lockdown imposed in the country between March and June saw EABL sales plummet.
Tanzania was the only market that recorded growth in both halves (H1 and H2) due to limited government restrictions in response to COVID19. In this case, net sales in Tanzania grew 14 percent year on year driven by an impressive 19 percent growth in H1 and 10 percent growth in H2. In addition, the nation recorded double-digit growth in premium and mainstream beer segments and improved spirits performance.
Gross revenues declined from Ksh82.5 billion in 2019 to Ksh75 billion in 2020 that saw gross profits decline to Ksh33 billion from Ksh38.1 billion in 2019. This in turn saw EABL tax payments decline by 42.3 percent to Ksh3.634 billion in 2020 compared to Ksh6.3 billion paid in 2019.
EABL is committing Ksh500 million to support the recovery of on-trade outlets in Nairobi, Kampala, and Dar es Salaam.
EABL did not declare any dividend citing the need to conserve cash to support the business and the uncertainty in the external environment. The brewer says that the interim dividend of Ksh3.00 per share amounting to Ksh2.372 billion paid in April 2020 will be the full and final dividend of the year.
The Annual General Meeting for the year 2020 will be held on Wednesday, 16 September 2020.