East African Breweries Limited (EABL) has posted a 21 per cent decline in profit to Sh12 billion for the financial year ended June 30, 2023.

EABL blamed the drastic reduction in profit compared to the previous year on depressed consumer spending, rising input costs, multiple excise tax hikes and currency depreciation.

EABL’s net sales also remained constant at Sh109 billion for the reviewed period with its move to increase its retail prices and cost management initiatives doing little to change this.

The firm also had to grapple a 7 per cent year-on-year volume reduction and it blamed this on the prevailing tough macro-economic environment and regulatory disruptions in Kenya.

EABL Board has also halved its proposed dividend payout for the fiscal year to Sh5.50 per share.

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During the fiscal year, the brewer’s net sales in Kenya went down by four per cent with an increase in the excise tax adversely affecting its price-sensitive mainstream segment.

The closure of bars and other disruptions ordered by the Kenya Kwanza administration, mainly in Central Kenya, has also eaten into the company’s expected revenue performance.

Despite all this, EABL posted a double-digit growth in the premium spirits segment as Uganda posted a 17 per cent growth backed by pricing benefits and slight growth in volume.

“EABL remained resilient despite the macro-economic headwinds, including global inflation and geopolitical disruptions, which disproportionately raised our costs and depressed consumer spending across the year,” said EABL Group Managing Director and CEO Jane Karuku.

However, Karuku says, despite all the hurdles experienced during the year, the regional brewer remains optimistic or realizing significant growth in the 2023-2024 financial year.

“As we navigate the current volatility, we remain optimistic about the growth prospects for our business. We continue to invest in our advantaged portfolio of brands and insight-led innovations to meet the ever-evolving needs of our consumers,” she averred.

She added, “Together with the relentless dedication of our teams, I expect that we will continue to deliver topline growth, sustained profitability and consistent cash flow generation.”

EABL revealed that it is pumping Sh12.9 billion into capital expenditure for this year as it continues to reap rewards from its investments in brands, digital and consumer experiences.