Beer maker East African Breweries Ltd (EABL) has taken a hard hit from the closure of bars and restaurants in the wake of the Covid-19 pandemic, becoming the first listed company in the region to issue a profit warning.
EABL’s net revenue increased by 12 per cent last year to Ksh82.5 billion enabling the giant brewer to pay its shareholders a total dividend of Ksh8.50 per share.
“Consequently the board of directors of the company hereby informs its shareholders and the general public that EABL’s current performance forecast indicates a decline in profit after tax of approximately 25 per cent for the financial year ending June 30 versus prior year.”
During the six months’ period to December 31 2019, EABL’s net profit increased nine per cent to Ksh7.2 billion ($72 million) from Ksh6.6 billion ($66 million) in the same period in 2018, with net sales in Tanzania growing 19 per cent compared with 10 per cent and eight per cent in Uganda and Kenya respectively.
In Kenya, EABL is worried that the consistent increase in excise tax by the government is having a negative impact on its business, particularly bottled beer brands, which posted a one per cent decline in sales.