E-Malt.com News article: Uganda & Kenya: East African Breweries H1 pretax profit up 22%

East African Breweries posted a 22 percent rise in first-half pretax profit to 6.45 billion shillings, ($94.85 million) for the six months ended December 31, 2007, boosted by sales in its main Kenyan market, the company said, according to Reuters, March 3.

"We have delivered extremely good profit before tax growth of 22 percent. Kenya has provided the powerhouse of revenue growth," group commercial director Chris Caldwell told a briefing for investors.

Kenya contributed 66 percent of the group's 16.1 billion shillings of revenues in the first half to end-December, up 27 percent from the previous year's total.

The company, majority owned by the world's biggest drinks group, Diageo, had pretax profit of 5.3 billion shillings in the first half a year ago.

EABL said post-election unrest in Kenya had disrupted transportation of products and fuel to plants in Uganda for five days in December, and slowed sales in January and February.

A disputed presidential vote triggered violence that killed at least 1,000 people, displaced 300,000 and interrupted economic activity.

The company hopes to recover in the second half, after President Mwai Kibaki and opposition leader Raila Odinga signed a power-sharing deal last week, helping ease tension in the country and restore investor confidence.

"In the last weeks of the year we lost several hundred thousand cases of sales. We do anticipate, with the political settlement, growth will return in the last few months of the year," Caldwell added.

The group has six companies, among them Kenya Breweries, Uganda Breweries, and a stake in Tanzania Breweries.

Its shares closed at 155 shillings on the Nairobi Stock Exchange on Friday, compared with 144 shillings on Thursday.

It is also cross-listed on Tanzania's and Uganda's bourses.

The group proposed an interim dividend of 2.40 shillings per share, up from 2.15 shillings a year ago.

EABL plans to spend 1.3 billion to 1.5 billion shillings to expand its glass plant and 1 billion shillings to expand its malting plant. It will also add a new 3 billion shilling packaging plant, scheduled for the end of the year.


05 March, 2008