EABL first-half pretax profit up 5pc
14 February 2014, 15:48
Nairobi - East African Breweries (EABL) posted on Friday a 5 percent rise in first-half pretax profit due to higher sales.
The firm, controlled by Britain's Diageo said pretax profit rose to 6.08 billion shillings during its first half ended December, while revenues were up 4 percent to 31.86 billion shillings.
EABL, which also operates in Tanzania and Uganda, said profit growth was due to the rise in net sales and a 1 percent decline in cost of sales driven by cheaper raw materials.
But Tracey Barnes, EABL's finance director, told a news conference that a new excise duty imposed on one of its brands, Senator Keg, led to an 85 percent drop in the brand's sales.
"We do remain disappointed in the government's decision to tax the product," Barnes said.
The new tax was part of measures in the 2013/14 (July-June) fiscal budget, aimed at increasing government revenues.
Senator Keg, sold in high volumes, was previously exempt from the duty.
The brewer said its earnings per share rose slightly to 4.99 shillings from 4.75 shillings in first half ending December 2012.
EABL plans to pay an interim dividend of 1.50 shillings per share, similar to the corresponding period last year.