East Africa Breweries Limited (EABL) has posted a robust 20% increase in its net profit, which rose to Ksh 8.1 billion for the half-year period ending December 31, 2024. This growth comes on the back of strategic cost-cutting measures and increased sales, despite facing challenges such as rising material input costs and the persistent issue of illicit trade.
The company attributes its strong performance to several key factors, including lower inflation and reduced borrowing costs, which have alleviated financial pressures and contributed to improved margins. The increase in sales, driven by higher consumer demand, also played a pivotal role in the profit surge.
A major focus for EABL moving forward is expanding its contract farming initiative, a strategy aimed at reducing the brewer’s reliance on imported raw materials, thereby lowering production costs. Currently, EABL is working with 40,000 smallholder farmers across the region under this program, and it plans to scale this number significantly. The brewer is collaborating with the Kenya Agriculture and Livestock Research Organization (KALRO) to distribute quality sorghum seeds, which will help farmers improve yields and ensure a steady supply of the crop for EABL’s production needs.
EABL’s commitment to contract farming is aligned with its broader goal of supporting local economies and enhancing food security. By fostering stronger partnerships with farmers, the brewer not only secures its supply chain but also contributes to the livelihoods of thousands of smallholder farmers in the region.
The company also made an important announcement during its investor briefing: EABL’s board has proposed an interim dividend of Ksh 2.50 per share, a substantial increase from the Ksh 1 per share paid out during the same period last year. This increase underscores the company’s strong financial position and its commitment to rewarding its shareholders amid a period of solid growth.
In conclusion, EABL’s impressive profit growth, coupled with its strategic investment in local agriculture, highlights the company’s ability to navigate challenges and remain a key player in East Africa’s brewing industry. The expanded contract farming program is set to bolster EABL’s long-term sustainability while providing significant benefits to the local economy and the farming community.
