East African Breweries PLC

RESULTS FOR THE YEAR ENDED 30th JUNE 2023 (AUDITED)

The Board of Directors of East African Breweries PLC (EABL) is pleased to announce its audited results for the year ended 30th June 2023.

We have delivered these results in a period deeply impacted by high cost inflation, multiple excise tax increases and currency depreciation in Kenya. Despite the continued headwinds, we managed to hold revenues flat against the prior year.

Profit after tax however declined 21%. Nevertheless, the EABL Board has declared a final dividend of Kshs 1.75 per share, bringing the total dividend to Kshs 5.50, which in the circumstances, we believe the shareholders will appreciate.

While we acknowledge a more challenging operating environment, our underlying business is resilient and we continue to execute our strategy relentlessly.

Dr. Martin Oduor-Otieno - Group Chairman

Net Sales

Profit After Tax

Kshs 109.6bn

Kshs 12.3bn

+0.2%

-21%

The business remained resilient on the back of a challenging operating environment. We are responding with agility and efficiency to changing market conditions, whilst

leveraging our geographical footprint and advantaged portfolio to unlock new opportunities.

Data led consumer insights kept us attuned to consumers' needs which led to curated consumer experiences and the launch of exciting innovations, further reinforcing our brands' connection with our consumers.

To drive operational efficiency, we have embraced lean principles to streamline processes, eliminate waste and manage our costs. These actions have enabled the partial mitigation of the high inflationary environment.

We continue to execute on our strategy and are confident that our business is strongly positioned for a recovery in consumer demand and to deliver long term growth.

Ms. Jane Karuku - Group MD & CEO

Dividend Per Share

Kshs 5.50

F22: Kshs 11.00

Condensed consolidated statement of comprehensive income for the year ended:

30 June 2023

30 June 2022

Kshs 'M

Kshs 'M

Gross sales

197,611

193,850

Indirect taxes

(87,962)

(84,441)

Net revenue

109,649

109,409

Cost of sales

(62,249)

(56,553)

Gross profit

47,400

52,856

Operating costs

(23,206)

(24,604)

Net finance costs

(5,485)

(4,236)

Profit before income tax

18,709

24,016

Income tax expense

(6,386)

(8,442)

Profit for the year

12,323

15,574

Other comprehensive income

4,237

1,272

Total comprehensive income

16,560

16,846

Basic earnings per share

12.47

15.00

Condensed consolidated statement of changes in equity

Share capital

Non

& share

Other

Retained

Proposed

controlling

premium

reserves

earnings

dividends

interest

Total

Kshs 'M

Kshs 'M

Kshs 'M

Kshs 'M

Kshs 'M

Kshs 'M

At 30 June 2021

3,273

(2,607)

5,519

-

8,667

14,852

Comprehensive income

-

1,229

11,857

-

3,760

16,846

Employees share based ownership plan

-

(92)

-

-

-

(92)

Dividends

-

-

(8,698)

5,733

(2,227)

(5,192)

At 30 June 2022

3,273

(1,470)

8,678

5,733

10,200

26,414

Comprehensive income

-

4,124

9,857

-

2,579

16,560

Employees share based ownership plan

-

(85)

-

-

-

(85)

Dividends:

-Final for 2022

-

-

-

(5,733)

(2,447)

(8,180)

-Total for 2023

-

-

(4,349)

1,384

-

(2,965)

At 30 June 2023

3,273

2,569

14,186

1,384

10,332

31,744

Condensed consolidated statement of cash flows for the year ended:

30 June 2023

30 June 2022

Kshs 'M

Kshs 'M

Cash generated from operations

26,145

35,330

Net interest paid

(5,485)

(4,048)

Income tax paid

(9,606)

(5,376)

Net cash generated from operating activities

11,054

25,906

Purchase of property, plant and equipment

(12,926)

(13,007)

Other investing activities

(100)

(165)

Net cash used in investing activities

(13,026)

(13,172)

Dividends paid

(10,852)

(5,225)

Proceeds from borrowings

37,962

19,519

Repayment of borrowings

(23,563)

(22,926)

Other financing activities

(883)

(766)

Net cash generated from financing activities

2,664

(9,398)

Net increase in cash and cash equivalents

692

3,336

At start of the year

8,067

4,421

Foreign exchange impact of translation

284

310

Net increase in cash and cash equivalents

692

3,336

Cash and cash equivalents at the end of the year

9,043

8,067

Condensed consolidated statement of financial position as at:

30 June 2023

30 June 2022

Kshs 'M

Kshs 'M

Share capital and share premium

3,273

3,273

Retained earnings

14,186

8,678

Other reserves

2,569

(1,470)

Proposed dividend

1,384

5,733

Non-controlling interests

10,332

10,200

Total equity

31,744

26,414

Borrowings

51,017

36,161

Other non-current liabilities

7,941

6,013

Non-current liabilities

58,958

42,174

Total equity and non-current liabilities

90,702

68,588

Property, plant and equipment

81,477

68,585

Other non-current assets

7,678

6,431

Non-current assets

89,155

75,016

Inventories

15,608

13,272

Trade and other receivables

12,250

11,793

Cash and bank balances

10,253

9,942

Other current assets

5,327

404

Current assets

43,438

35,411

Trade and other payables

30,527

32,210

Borrowings

8,401

6,634

Bank overdraft

1,210

1,875

Other current liabilities

1,753

1,120

Current liabilities

41,891

41,839

Net current assets/(liabilities)

1,547

(6,428)

90,702

68,588

Operating Environment

Over the past year, our business has navigated an increasingly complex operating landscape characterised by a host of macro-economic headwinds. Specifically, regional economic slowdown and inflationary pressure not only impacted consumers' disposable incomes but also significantly increased the cost of doing business. Further, currency deterioration, higher taxes and rising interest rates particularly in Kenya further impacted our business performance. With reduced disposable incomes, we witnessed volume contraction as consumers adjusted their purchasing behaviour. The economic conditions have also led to a resurgence in illicit trade as consumers move to cheaper unregulated products.

Business Review

  • The Group generated net sales of Kshs 109.6 billion, flat compared to the prior year. Pricing and improved product mix benefits were offset by a 7% decline in volumes, particularly in the mainstream beer category. Uganda and Tanzania delivered growth at 17% and 1% respectively, while Kenya declined by 4%.
  • Profit after tax at Kshs 12.3 billion, declined 21% vs prior year, as the impact of excise increases, inflationary pressures and currency depreciation could not be fully offset by increased prices and cost management initiatives.
  • We invested a further Kshs 12.9 billion in capital expenditure as we completed investments to support long term growth.

Looking Ahead

Despite the operating environment headwinds, the Board of Directors of EABL affirms its confidence in our strategy and our commitment to delivering sustainable growth. We will continue to serve our consumers with focus on commercial execution excellence, to invest behind our strong brands and manage cost and investments effectively. We remain deeply committed to environmental stewardship, social responsibility, and governance practices that align with our values and guarantee long-term sustainability.

Dividend

An interim dividend of Kshs 3.75 was paid during the year (2022: Kshs 3.75). The Board of Directors has

recommended a final dividend of Kshs 1.75 per share (2022: Kshs 7.25) subject to withholding tax, to be paid on or about 27th October 2023 to shareholders registered at the close of business on 15th September 2023. This will bring the total dividend for the year to Kshs 5.50 per share (2022: Kshs 11.00).

By order of the Board

Kathryne Maundu

Group Company Secretary

Date: 27 July 2023

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

East African Breweries Ltd. published this content on 28 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2023 09:06:06 UTC.