East African Breweries Ltd (EABL) revealed Thursday its net profit dropped by 0.39 per cent in the six months to December on the back of higher taxes and input costs, and as price-sensitive consumers shunned the frothy drink.
EABL – which is controlled by Britain’s Diageo and is known for its flagship Tusker beer – saw its net earnings decline by Sh34 million to Sh8.703 billion in the half year from Sh8.737 billion booked in a similar period in 2021.
EABL Group Chief Executive Jane Karuku said inflation and higher taxes afflicted the brewer by reducing consumers’ purchasing power even as input costs jumped due to high costs of ingredients.
“We have witnessed a slowdown in economic growth across the region, with steep excise tax increases in Kenya adding to the heightened inflationary pressures,” she said in a statement.
“As a result, consumer spending power is depressed and operating costs have increased significantly.”
Revenues from Kenya dropped by one per cent in the period, even as revenues in Uganda and Tanzania grew by 19 per cent and 11 per cent respectively to help offset the poor performance in Kenya.
EABL said multiple excise tax increases in Kenya over the past 15 months have exacerbated consumer prices and have particularly impacted price-sensitive consumers in mainstream and value segments.
Despite the lower performance and the gloomy outlook, the Nairobi Securities Exchange-listed firm has declared an interim dividend of Sh3.75 per share, similar to the same period last year, offering something to smile about to its shareholders.
