East African Breweries Limited (EABL) has posted a profit of Ksh7.2 billion for the half-year ended December 31, 2019, representing a 9% increase compared to a similar period the previous year.
The company attributes its profits to increased revenue, strong innovation pipeline and cost efficiency.
Revenue posted by the brewers also increased from Ksh41.57 billion in December 2018 to Ksh45.85 billion this year.
Profit before income tax stood at Ksh 10.6 billion up from Ksh9.7 billion while gross profit stood at Ksh21.8 billion up from Ksh19.17 billion.
The group’s capital expenditure stood at Ksh4.4 billion channeled into improving production capacity for existing and new brands.
The Diageo owned company has now recommended an interim dividend of Ksh3 per share up from the Ksh2.50 recommended the previous year.
Speaking after the release of the results, EABL CEO Andrew Cowan said that despite the good perfomance the company is heading to H2 cautiously amid a tough business operating environment.
“We remain cautiously optimistic about our second half of the year, although unpredicted tax and regulatory changes and challenges in our operating environment continue to present potential risks,” Mr Cowan said.
According to Cowan, group volumes grew by 5% driven by a strong mix of brand categories.
During the course of last year, the brewers embarked on adding new brands to its portfolio including Tusker Cider, Hop House 13, Guinness Smooth, Sikera, Smirnoff X and Triple Ace Vodka.
Cowan says the new brands have been instrumental in increasing the company’s profits.