By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Newsunplug KenyaNewsunplug KenyaNewsunplug Kenya
  • News
    • Metro
    • Politics
    • Business
  • Entertainment
  • Lifestyle
  • Sports
  • Tech
  • Spotify
Reading: EABL import bill shoots up by Sh2 billion on plunging Kenya shilling
Share
Notification Show More
Font ResizerAa
Newsunplug KenyaNewsunplug Kenya
Font ResizerAa
  • News
  • Entertainment
  • Lifestyle
  • Sports
  • Tech
  • Spotify
  • News
    • Metro
    • Politics
    • Business
  • Entertainment
  • Lifestyle
  • Sports
  • Tech
  • Spotify
Have an existing account? Sign In
Follow US
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
Newsunplug Kenya > Blog > Business > EABL import bill shoots up by Sh2 billion on plunging Kenya shilling
Business

EABL import bill shoots up by Sh2 billion on plunging Kenya shilling

hallanaija
Last updated: August 1, 2023 3:51 pm
hallanaija
2 years ago
Share
EABL
East African Breweries Limited Chief Financial Officer, Risper Ohaga during the brewer's half-year results on January 27, 2023. PHOTO | DIANA NGILA | NMG
SHARE

East African Breweries Ltd (EABL) suffered a Sh2.1 billion hit on account of the depreciating shilling, contributing to its net income dropping 21 percent to Sh12.3 billion in the year ended June.

According to data from the Central Bank of Kenya (CBK), the shilling fell by 20.8 percent in the period between July 1, 2022, and June 30, 2023, translating into escalated import costs for manufacturers such as EABL.

The brewer’s cost of goods sold increased by 10.1 percent in the period under review to Sh62.2 billion, gobbling up 56 percent of its net sales up from 51.0 percent a year earlier.

“We have seen very rapid depreciation of the shilling given that we started off at about 117 to the US dollar and closed at about 142 with most of the depreciation happening in the second half of the accounting period,” EABL chief financial officer and head of strategy, Risper Ohaga, told the Business Daily.

“With scarcity of raw materials, we ended up importing more and that translated into bigger foreign exchange hits so we do have about a Sh2.1 billion hit on foreign exchange.”

READ MORE  Airtel Africa ready to list Kenya unit on NSE as licensing condition

EABL says whereas access to the US dollar to service its import bill improved in the period between January and June 2023 relative to the period July to December 2022, the shortage of raw materials locally translated into a higher need for imports, which amplified the manufacturer’s exposure to foreign exchange see-saws.

Accessibility of the US dollar improved in the second half of EABL’s reporting period following the government-to-government petroleum product importation deal with the Gulf nations which has improved dollar liquidity due to deferred payments by oil marketing companies which are estimated at $500 million monthly.

EABL
East African Breweries Limited Chief Financial Officer, Risper Ohaga during the brewer’s half-year results on January 27, 2023. PHOTO | DIANA NGILA | NMG

“Fortunately, we were able to access foreign currency within the second half but then with the scarcity of raw material, you end up importing more. Whenever we import, we have to access foreign exchange and with continued exposure, we will remain exposed,” Ms Ohaga said.

“Ethanol was scarce throughout the entire second half with the shortage having started towards the end of the first half and we are now having to source ethanol at 60 percent above what it was before.”

READ MORE  President Ruto saves Airtel Kenya, Amazon from forced stake sale

EABL’s board has proposed to slash by half the firm’s full-year dividend to Sh5.5 per share for the period ended June 2023 signalling aggressive capital preservation amidst rising headwinds in the operating environment.

Equity bars TransCentury from Sh500m new cash
US rate increase hands Kamau Thugge fresh headache
Sotheby’s Sales Drop In 2023 After Record Year
Fuel adulteration rises on huge price difference
NSSF Announces Vacancies for Kenyans, Others With Minimum Qualification of KCSE Certificate
Share This Article
Facebook Email Print
Previous Article gachagua Gachagua Speaks On Ruto’s Move To Cap Foreign Travel
Next Article Ruto President Ruto Concerned With CSs, PSs Not Familiar With Dockets
Leave a Comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

about us

We influence 20 million users and is the number one business and technology news network on the planet.

Recent Posts

  • US sanctions on Sudan over alleged chemical weapons use take effect
  • President Ruto set to depart for official visits to Spain and UK
  • AK-47 rifle stolen during June 25 protests recovered in Kabete
  • Liverpool Reaches Agreement with Napoli for Victor Osimhen Transfer
  • 🚨 BREAKING: England U21 Crowned European Champions After Thrilling Tournament Run

Recent Comments

No comments to show.
Newsunplug KenyaNewsunplug Kenya
© Newsunplug Kenya. All Rights Reserved.
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?