[2008-09-01]  Beer maker’s profit goes up by 22 per cent
East African Breweries Limited, the parent company of Uganda Breweries, has announced a significant increment in profit, as a result of increased sales from its low-end brands like Senator, and Pilsner, and Tusker, in the region.

The brands which target the low income earners were boosted by immense cash investment in marketing and promotions like the Shs700 million Senator cultural gala campaign.

Speaking at an investor presentation of the company’s results in Kampala last Friday, Ms Bernadette Mutuku UBL’s Head of Finance announced a profit before tax of Shs307.5 billion, in its end of year results, for the period ending on June 30 2008 compared to Shs265 billion earned last year.

She said the growth in profit before tax represents a 16 percent increase in profit in comparison with its 2007 earnings. Overall, the company’s gross profit surged by 22 percent to Shs432 billion, from Shs355 billion.

The East African Breweries Limited (EABL) Group consists of Uganda Breweries Limited (UBL), Kenya Breweries, International Distillers Uganda, East African Maltings, and Central Glass Industries. The company’s beer and spirits volumes increased by 15 percent to 770,000 hectolitres. UBL contributed Kshs1.2 billion (Shs28.5 billion), to the group’s earnings.

As a result of the earnings, the company has also increased its full year dividend per share to Shs301 up by 10 percent from last year.

Commenting on the performance, Ms Patricia Ithau the Managing Director EABL Venture said, the results mean that company is going to be able to offer more assurance to the economies in which it operates in the form of revenue, and will also continue to invest in our brands to be able to avail more quality products to our customers in this market.

EABL remains one the regions major tax contributors and has paid Shs625 billion from Shs575 billion, in the market within which it operates. She added: “It also means that we are going to be able to ensure that we are sustainable in these market, we are not going away as a business.”

The company said the results were achieved despite continuing economic pressures across the region, driven by increased fuel prices and inflation as well as this year’s post-election turmoil in Kenya. “Despite minor setbacks during the sad chapter in Kenya when we witnessed poll violence in December and January, all our business have performed well and have sustained our market shares,” said Ms Ithau.

She also acknowledged that EABL has come under increasing pressure from new entrants in the beer business, and the increasing aggressiveness of the existing players. In Uganda Parambot Breweries the maker of Moonberg Lager, is one of the new competitors.

According to her, the new players and importers of foreign beer and spirits are eyeing the growing market in the East African region. The bloc boasts of having a growing population in excess of 100 million to date, which offers huge market opportunities to manufactures. “They have seen the opportunity in this market,” Ms Ithau noted.

She said to beat off this competition the company was strengthening its marketing strategy, coming up with new products like Alvaro, a new non-alcoholic drink in Kenya, as well as reinventing its existing brands.
Source: © 2008 Monitor Publications Ltd