East African Breweries Limited (EABL) has shown a net sales expansion by 13 percent to Sh124.1 billion in the full year ending June 2024. This growth, driven by strategic pricing, a strong portfolio, and new product innovations, comes despite a challenging economic environment that saw the company’s profit after tax decline by 12 percent to Sh10.9 billion from Sh12.32 billion in the previous year.
EABL Group Chairman Martin Oduor-Otieno highlighted the company’s ability to navigate through “inflationary pressures, regulatory changes, rising interest rates and fluctuating currency” which posed substantial hurdles for consumer spending and business operations. The company’s strategic approach has allowed it to maintain growth in sales despite these obstacles.
The challenges faced by EABL were multifaceted and significant. Rising inflation played a major role, with Kenya’s inflation rate reaching 6.8 percent in September 2023. This surge in prices forced many Kenyans to tighten their belts, reducing spending on entertainment and non-essential items, which directly impacted EABL’s market.
Compounding the inflationary pressures, the Kenyan shilling experienced significant devaluation against major currencies. Early in 2024, the local currency was trading at approximately Sh160 to one US dollar, a stark indication of the economic volatility EABL had to navigate. This currency fluctuation not only affected the company’s import costs but also influenced consumer purchasing power.
Further complicating the business landscape were instances of social unrest and floods. These external factors added another layer of complexity to EABL’s operating environment, potentially disrupting supply chains and consumer behavior.
Despite these formidable headwinds, EABL’s strategic initiatives allowed it to grow its net sales significantly. This performance demonstrates the company’s adaptability and strong market position in East Africa’s competitive beverage industry.
In a show of confidence in the company’s future prospects and commitment to shareholder value, the Board of Directors has recommended a final dividend of Ksh 6.00 per share, subject to withholding tax. This dividend is scheduled for payment on or about 28th October 2024 to shareholders registered at the close of business on 16th September 2024. If approved, the total dividend for the year will amount to Ksh 7.00 per share, a notable increase from the previous year’s Ksh 5.50.
EABL’s ability to increase its dividend payout while navigating through such challenging economic conditions underscores the company’s financial strength and optimistic outlook.
ALSO READ; https://financialday.co.ke/2668/eabl-half-year-profit-dips-22pc-to-ksh6-8-billion/