East African Breweries Ltd increased after-tax profit by 2 percent in its first half to the end of December, despite beer sales in its main market Kenya being hurt by tax increases, it said on Thursday.
The company, controlled by Britain’s Diageo, said in a statement that net sales in Kenya were flat while Uganda posted a 7 percent jump in sales.
It did not give absolute figures, but in the first half that ended December 2015, its after-tax profit from ongoing operations was 5.5 billion shillings ($53 million). [nL8N15C3PK]
The company said Kenya makes up 70 percent of its profits, and this had been affected by tax hikes.
“There have been four major excise duty increases affecting bottled beer volumes in the last five years, with the most aggressive one taking effect in December 2015 – a 43 percent rise in duty,” Andrew Cowan, its group managing director and chief executive, said.
“This was the highest excise duty increase in Africa,” he said.
EABL said operating margins rose to 27 percent from 25 percent.
It recommended an interim dividend of 2 shillings a share, unchanged from the same period in 2015.
The company is due to release more details of its earnings on Friday.
($1 = 103.9000 Kenyan shillings)