East African Breweries Limited (EABL) has announced a 12 per cent decline in its profit after tax for the financial year ending June 2024.

The brewer attributed the slump to a confluence of economic challenges including soaring inflation, currency devaluation, and political unrest.

The company’s net profit dipped from Sh12.32 billion in the previous year to Sh10.9 billion, marking a significant downturn in its financial performance.

This comes as Kenya grappled with a challenging economic environment, characterized by rising costs of living and a depreciating shilling.

Inflation, which peaked at 6.8 per cent in September 2023, eroded consumer spending power, forcing many Kenyans to tighten their belts.

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The resultant squeeze on discretionary income negatively impacted EABL’s sales, as consumers cut back on entertainment and other non-essential items.

The brewing giant also faced headwinds from currency fluctuations.

The Kenyan shilling’s depreciation against major currencies such as the US dollar, euro, and pound sterling increased the cost of imported raw materials, impacting EABL’s profitability.

Despite these challenges, the company managed to grow its net sales by 13 per cent to Sh124.1 billion.

This was achieved through strategic pricing adjustments, a robust product portfolio, and the introduction of new offerings.

In a statement, EABL Group Chairman Martin Oduor-Otieno acknowledged the impact of these factors on the business.

“Inflationary pressures, regulatory changes, rising interest rates and fluctuating currency posed substantial hurdles for consumer spending and business operations,” Oduor said.

Looking ahead, the company remains optimistic about its prospects and has proposed a final dividend of Sh6.00 per share, bringing the total dividend for the year to Sh7.00 per share.

"The Board of Directors recommends a ­nal dividend of Kshs 6.00 per share subject to withholding tax."

This dividend will be paid on or about 28th October 2024 to shareholders registered by 16th September 2024.