Parent company says sales remained flat due to a dip in sales of Senator Keg.
This means that the regional brewer’s sales for the period under review will be in the region of Sh35.2 billion.
In the six months to December 2016, the brewer posted a net profit of Sh5.6 billion, representing a growth of two per cent from the Sh5.5 billion posted the previous year.
Spirits such as Ciroc, Johnnie Walker and Smirnoff have emerged as another revenue churner for the brewer, consistently returning double-digit growth in sales.
East African Breweries Limited's (EABL) revenues for the six months to December have remained flat as political uncertainty arising from last year’s elections slowed down consumption, the brewer’s parent company Diageo has disclosed.
This means that the regional brewer’s sales for the period under review will be in the region of Sh35.2 billion, taking into consideration exchange rates differences between sterling pound, Diageo’s reporting currency, and the Kenya shilling.
EABL’s flat sales were mostly due to a dip in sales of Senator Keg, a low cost drink, which undid a resurgence by Guinness and Tusker whose sales in the period jumped three per cent and one per cent respectively.
Diageo, which is listed at the London Stock Exchange (LSE), released its half-year results Thursday with EABL, whose shares trade on the Nairobi Securities Exchange (NSE) #ticker:NSE, expected to follow suit Friday.
“Despite the uncertain environment in its home market, Tusker grew one per cent in East Africa supported by the ‘Here’s To Us’ campaign,” Diageo said in a statement Thursday.
“Guinness net sales increased three per cent, as it leveraged activations around the English Premier League football matches. Mainstream spirits continued to deliver strong performance driven by improved distribution and increased marketing investment.”
Pressure from tax
In the six months to December 2016, the brewer posted a net profit of Sh5.6 billion, representing a growth of two per cent from the Sh5.5 billion posted the previous year.
EABL’s mainstream beer sales have come under pressure from excise tax increases in recent years that has raised consumer prices, with Tusker, Pilsner and Guinness most affected.
Senator Keg, a drink brewed from sorghum and dispensed in mugs from barrels, has emerged as beer volume driver for the regional brewer due to its lower purchase price.
The upsurge in consumption of the drink has seen EABL announce plans to construct a Sh15 billion Senator Keg factory in Kisumu to boost production and meet growing demand.
Spirits such as Ciroc, Johnnie Walker and Smirnoff have emerged as another revenue churner for the brewer, consistently returning double-digit growth in sales.
The changing consumption trends have forced EABL to step up its innovation to help grow sales, occasioning the launch of brands such as Kenya Cane Coconut and Tusker Cider.
Last November, the brewer started brewing Captain Morgan Gold at its Ruaraka brewery in Nairobi, with a 250ml bottle of the premium spirit currently retailing at a recommended retail price of Sh270.
Other like Kenya Cane Citrus and a Dublin-based beer called Hop House are in the pipeline.
