Investors in East African Breweries Limited (EABL) are set to experience a 72.9 percent reduction in interim dividends, following a dip in the company’s net profit during the six months leading to December 2023.
This decline is attributed to the impact of a weakened shilling and elevated operating costs that the firm incurred.
Shareholders of the firm will now receive a diminished dividend of Ksh1 per share, down from the previous KSh3.75, reflecting a 22 percent decrease in earnings, totaling Ksh6.7 billion.
Despite this downturn, the company witnessed a two percent increase in volumes, driven by robust consumer demand.
This growth was facilitated by the utilisation of a robust and expanding portfolio, complemented by effective commercial execution.
In an official statement, EABL highlighted net sales growth in all three key markets, with Kenya experiencing a 10 percent surge, Uganda showing an impressive 31 percent increase, and Tanzania registering a nine percent uptick.
The company also observed noteworthy expansion in the beer and spirits categories, with growth rates of 18 percent and 13 percent, respectively, during the review period.
However, these positive gains were tempered by the adverse impact of a weakened shilling, which has so far suffered over 20 percent depreciation against the dollar.
Notably, the Ruaraka-based brewer recorded a substantial foreign exchange loss amounting to Sh2.3 billion, underlining the challenges posed by the currency devaluation on the company’s financial performance.