East African Breweries (EABL) has reported Kshs 57.3 billion ($532 million) in net sales for the half year ending December 31st, 2022, representing a 4% growth compared to the same period last year. However, group volumes declined by 4% YoY as price increases impacted consumer purchasing patterns, mainly in mainstream and value segments.
EABL Group Managing Director & CEO, Ms. Jane Karuku, said that the company 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.” These issues were further compounded by excise-related price increases in Kenya, which significantly affected consumption of the company’s brands.
In July 2022, Kenya’s excise tax for beer and spirits came into effect following the 2022/23 budget, increasing by 10% and 20%, respectively. In October 2022, beer and spirits consumers were hit by a further 6.3% excise tax increase in the form of an 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% for beer and 34% for spirits. Consequently, beer volumes were down 13% in Kenya, with performance further undermined by a reemergence of illicit alcohol during the period under review.
As a result, EABL’s net sales growth regressed by 1% in Kenya, its largest market, while Uganda and Tanzania grew by 19% and 11%, respectively. The Group’s slower top-line growth resulted in Kshs 8.7 billion in profit, which was flat compared to the same period last year. The EABL Board has recommended an interim dividend of Kshs 3.75 per share, similar to the same period last year.
