[2008-09-02]  Brewer Declares KES12.3Bn Profit

East African Breweries Limited has announced a 16 per cent increase in its pre-tax profit for the year ending June 30, 2008.The group recorded a pre-tax profit of KES12.3bn against KES10.6bn recorded in 2007, even as inflation and expansion costs increased pressure on its profit levels.” This has been a fairly exciting year for us," group managing director Gerald Mahinda said as he released the results at a Nairobi hotel. The group will spend KES5bin over the next 12 months as it prepares to defend and acquire new markets for its products. It spent KES3bn last years in regrinding its products and commissioning a new production line for its new non-alcoholic soft drink- Alvaro."We have seen new beer come into the market and our local competitors are expanding. The market landscape is changing and that is the reality," Mr. Mahinda said.Keroche Breweries is set to launch beers. over the next two months, while distribution of Heineken has also intensified, threatening to eat into its market...Net turnover went up 26 per cent to KES32.5bin compared to the KES25.9bn recorded last year with Kenya coming top of the contributors at 71 per cent. Despite challenges The East African Breweries Limited Group consists of Kenya Breweries, Uganda Breweries, International Distillers Uganda, East African Maltings, Central Glass Industries, and UDV Kenya.” These results have been achieved despite continuing economic challenges across the region, driven by increased fuel prices and inflation," said Mr. Mahinda. Beer and spirits volumes increased by 16 per cent to 770,000 hectoliters and 10 per cent to 148,000 9-litre cases respectively while marketing and distribution spend went up by 46 per cent to KES680Mn. Senator, a beer targeting the lower end of the market was the leading contributor to the growth followed by its Tusker brand. Exports outside the East African market grew by 105 per cent to hit a net sale of KES1.5bn.Alvaro, still at what the company says is a test run in Nairobi, has sold over 8 million bottles since its launch about three months ago. Distribute nationally "We will be commissioning another production line early November that will make its possible for us to distribute the soft drink nationally," Mr. Mahinda said. On individual brand volume growth, John Walker has grown its sales by 69 per cent while Senator did 42 per cent. Guinness and White cap grew by 19 per cent and 17 per cent respectively. Pilsner dropped 16 per cent as was Richot brandy whose volume declined by four per cent. On its planned expansion to Ethiopia, the company said that it is still negotiating for entry to the market after its early buy into one of the government-owned breweries failed.




Source: BDAFRICA