East African Breweries : Robust Performance from EABL despite fall in Senator Volumes
08/07/2014 | 09:18pm EST
Robust Performance from EABL despite fall in Senator Volumes
East African Breweries Limited today announced its full-year results for the period ended 30th June 2014 with a net sales growth of 4% and 5% increase in profit after tax.
The results were buoyed by a mix of strong performance in Uganda, which grew by 13%. Sales in export markets grew by 50% while spirits, premium and mainstream beer delivered a double digit growth. However Senator Keg significantly declined post the implementation of excise tax.
"Our regional performance has been mixed. In Kenya, we experienced a difficult year due to the Senator Keg volume collapse. Tough trading conditions in Tanzania and volatility in South Sudan also contributed to weaker top line growth. However, our performance has been solid as evidenced by our overall growth" said EABL Group Managing Director, Mr. Charles Ireland.
Kenya delivered a slight decline of 1% on NSV due to Senator Keg performance. This was offset by a strong spirits performance and successful innovations in Jebel Gold and Senator Dark, both in the emerging category, alongside new marketing campaigns such as Tusker 'Twende Kazi'.
"I am very pleased with our performance in Uganda that yielded a net sales growth of 13%. Our price mix interventions and effective launch of Reserve brands played a key part in securing this positive result, along with a successful new Bell Lager campaign and a very strong performance on Uganda Waragi," added Mr. Ireland
Our Export markets grew 50%, supported by the opening of a depot in Juba and the introduction of cans. However performance slowed down due to political unrest from December 2013.
In Tanzania, business performance was affected by the short-term effect of our Route to Consumer changes. Serengeti Premium Lager grew by 16%, driven mainly by the Fiesta Music Tour and successful introduction of Serengeti Platinum.
Cost of sales improved by 1%, driven by supply chain efficiencies. Fixed costs under-recovery was mainly due to lower Senator Keg volumes but this was mitigated through Cost of Goods (CoGs) saving initiatives. Administrative expenses increased by 24% including one-off restructuring costs. Excluding these costs, underlying growth was 8%.
There was a 13% rise in selling and distribution costs as the business continues to invest in its brands. As a result of implementation of tax efficiency initiatives, the business lowered its effective tax rate by 7% to 34%. Total group borrowings increased in the year to fund operations and capital expenditure, while interest expenses increased as a result of this. Net capex investments rose to 6.8 billion in support of future growth.
"We are confident of the future and EABL's ability to win market share, backed by the business strength and agility, proactive brands and capex investments and the long-term outlook for East Africa's consumer economies." said Mr. Ireland.
A final dividend of Kshs 4/- per share has been recommended.
Click here to download the EABL Financial Results for the year ended 30 June 2014
Click here to view a summary of the EABL Financial Results for the year ended 30 June 2014
Kenya Breweries Ltd. is formally incorporated as a private company. The first beer is brewed on 14th December. The first batch delivered to the Stanley Hotel where it was opened to a mixed reaction.
First Annual General Meeting of the company is held. George Hurst, company founder, is killed in an elephant hunting accident. In his memory, his brother Charles decided to name the first beer brewed 'TUSKER'.
KBL's board decides to start using malted barley in the production process instead of imported malt extracts significantly improving TUSKER's appearance and flavour. This move saved the company at least £780per year.
KBL becomes a public company owing to the increased number of shareholders
Mombasa Brewery officially opened on 8th February by the colonial Governor of Kenya Sir Evelyn Baring. Initially, HRH Price Philip was meant to preside over the event, but was forced to travel back to England following the death of King George VI.
EABL is listed in the Nairobi Stock Exchange.
First Africans Messrs. J M Muchura and J Thuo appointed to the EABL board of directors.
Guinness East Africa Limited incorporated in Kenya. The board approved modernisation and expansion of the Tusker Plant in Ruaraka increasing production capacity by over 110,000 cases per month.
President Jomo Kenyatta lays the foundation stone of the company's new headquarters at Ruaraka and launches a multi-million pound five-year expansion programme. Wooden beer cases are replaced by more durable plastic cases
EABL completes the largest public share issue in Kenya's history offering 3 million ordinary shares at a price of Ksh.18 each, raising the number of shareholders to more than 23,000. KBL hosts a sports festival to aid Kenya Olympics team.
EABL celebrates 50 years Golden Jubilee with the opening of the new headquarters by His Excellency, Daniel Arap Moi - Vice President of Kenya. On the same day, celebrations to mark the occasion were held at all plants and depots throughout the country.
Construction work on Central Glass Industries begins. The plant went on to produce its first bottle in 1987.
KBL installs an ultra modern state of the art bottling line at Tusker Brewery. Citizen Special lager is launched. KBL celebrates its 75th Anniversary.
EABL signs license agreements with South African Breweries International and agree terms for share exchanges in Kenya Breweries Limited and Tanzania Breweries Ltd.
EABL becomes the first company in East Africa to reach US$1 Billion in value. The company cross-lists on the Dar-Es-Salaam Stock Exchange. The EABL Foundation is launched aimed at enriching the lives of poor and excluded people in East Africa.
KBL successfully launches Alvaro, the company's first non-alcoholic natural malt drink and records consumption of over eight Million bottles within the first three months following the launch.
EABL successfully acquires substantial interest in Tanzania's Serengeti Breweries Limited (SBL) making EABL free to complete the acquisition. SBL is Tanzania's second largest brewing operation and makers of the popular Premium Serengeti Lager.
Tusker renovates packaging relieving historical moments through a symbolic chariot drive to The Stanley Hotel
Deloitte Best Company to work for Survey 2012
EABL selected to host the first Diageo Africa HR Shared Service Centre to be based in Nairobi
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