East African Breweries Plc (EABL) will pay an additional Sh7.25 per share or an aggregate of Sh5.73 billion in final dividends after it more than doubled its net profit to Sh15.57 billion in the full-year ended June, helped by increased sales.
The company had made a net profit of Sh6.96 billion a year earlier. EABL’s profit growth was helped by higher net sales, which increased 27.28 percent to Sh109.40 billion from Sh85.96 billion.
The performance has seen the brewer return to paying dividends after declaring an interim payout of Sh3.7 per share or an aggregate of Sh2.96 billion in the half-year ended December.
EABL suspended dividends after the economic crisis and the closure of bars eroded its earnings in the wake of the Covid-19 pandemic. The brewer said yesterday vaccination drives across its key regional markets and bar reopening boosted its sales
In Kenya, EABL’s biggest market, net sales rose 30 percent, the company said. Net sales in Uganda and Tanzania rose 24 percent and 21 percent, respectively.
“The financial year saw the respective East African governments make significant strides in vaccine administration against Covid-19 leading to the easing of Covid-19 related restrictions that had been in place for the better part of the last two years,” said the brewer.
“This easing contributed to an improved operating environment as outlets reopened and consumer activities picked up.”
The company paid an interim dividend of Sh3 per share for the half year ended December 2019 before suspending the payouts.
The new proposed additional payout will be made on October 30 to shareholders on the register as of September 15.
This together with the interim dividend brings the total dividend for the year to Sh11.00 per share or an aggregate of Sh8.69 billion.
Managing director Jane Karuku said the company is cautiously optimistic about the short-term economic outlook.
“EABL is delighted to deliver another set of strong results, with robust growth in sales and a resounding triple-digit growth in profits,” said Ms Karuku in a statement.
“While our business has performed strongly this year, we expect near-term volatility to persist.
Evidence of runaway inflation seeping into the Kenyan economy is sending a chill through investors after major retailers reported people are cutting back on buying bigger-ticket items as they try to get by.
The company’s net debt declined to Sh34.7 billion from Sh41.8 billion a year earlier, helped by a restructuring of borrowings and improved profitability, it said.