EAST AFRICAN BREWERIES' HOLE IN THE POCKET

If nothing else, there is one hole in the pocket of East African Breweries PLC that may affect its fortunes this financial year ending June 2018. 

So hints unaudited half year figures to December 2017 released this week. It is a hole by cost of sale.

According to the figures released by Company secretary, Joyce N Munene, the group's net revenue grew by only 4.68% to Ksh 36.8bn from Ksh 35.15bn but cost of sale grew its own wings up by 12.3% to Ksh 20.83bn from Ksh 18.56bn.

And that made all the difference. Even though EABL was able to hold down total costs growth to 1.39% to Ksh 8.686bn, the damage was already done and profit before tax ended the half year at Ksh 7.28bn, down 9.34%.

However, EABL is hopeful that this will be a temporary set back since, says Munene, it was due to weakening of the Kenyan market in a trying election year; excise tax regime change in Uganda; accelerated sales and advertising promotion costs and, equally important, due to 14% rise in capital expenditure to Ksh 5.00bn to boost future business 

Besides, in spite of the times, new products introduced within the period contributed 21% more or Ksh 7.6bn to revenue with potential for higher chip in as the months roll by.

So, believing the hole will be blocked or become less menacing the directors are recommending Ksh 2 per share interim dividend payable by April 20 just the same amount dished out at the same time last financial year.

EAST AFRICAN BREWERIES: 
                      Half year, Kshm
                          Dec 2017.     Dec 2016
Net revenue       36800.          35156
Cost of sale.      20831.          18556
Gross profit.      15969            16600
Total costs          8686.             8567
Profit b4 tax        7283.             8033
Profit margin %     19.9.              22.8
Working capital    562.              151

Comments

Post a Comment

Popular posts from this blog

2018: TWO BLOWS TO UNITED CAPITAL PLC.

When a child who in a previous examination scored 80%, comes home with a new report in which he now scores 67.2%, the parents have a right to sit him down and ask how come. So it must be between Nigeria's United Capital Plc and its discerning shareholders since the release of the company's 2018 audited figures. In 2018, all said and done, says the annual report, United Capital ended with 67.2 % profit margin compared to 80.2% in 2017. How come? What comes across from the figures was that the company received 2 blows to the jugular in 2018: Sharp drops in Investment income and fair value gain. Investment income dropped by 10.8% to N4422.8m from N4965.2m while fair value on financial assets plunged by 79.7% to N6.173m from 2017's N30.387m. In view of both drops, the group's gross earnings grew by only 33.9% to N9259.4m despite strong growths in net trading income, and net operating income leap to N757.5m from N143.5m  Other income streams ended with single digit increase....
Read more

KENYA AUCTIONS Ksh 13.84bn Treasury Bonds.

The Central Bank of Kenya (CBK) will from Tuesday December 18 to 27th 2018_ auction Ksh 13.84bn worth of fixed income Treasury Bonds with issue date December 17, 2018. According to official statement from the Director of Financial Markets Irene Njiru on Monday December 17, auction will continue throughout the stated period or close once the target money to be raised is reached, whichever comes first. Bid value will be paid for at most by 2pm December 31, 2018 while auction results will be made public on December 28, 2018 after the scheduled closing date. The bonds are being issued at 12.502% fixed interest at an adjusted average price of Ksh 100.468 for Ksh 100 bond. However, price payable after auction results publication will be average of successful bid prices based and allotment will be on first come first served basis. Meanwhile, the monetary operations and debt management department has released the interest payment schedule for 13 Treasury Bonds due January and February 2019. Th...
Read more

NAIROBI SE's HIGH PRICED EQUITIES.

In the wake of Nigeria's high priced quoted companies posted in this blog a while ago, Henates took a look to at Nairobi Securities Exchange June 23 official list to identify its high priced equities and the outcome was interesting too. Of the 66 companies quoted on the market by June 23, 15 or 22.7% were valued averagely at above 30 times nominal value. A word of caution though: There are two clear differences between the Nigerian stock market list and that of Nairobi: In the Nigerian one most listed companies have par or nominal value of N0.50 as is there is an implied agreement on this. On the other hand, at Nairobi most of the equities do not share common par value, they differ greatly. Then another thing, Nigerian equities are not valued below par, Nairobi ones can and many are so valued. Of the top 15 high priced equities at the Nairobi market, Safaricom topped with because by June 23, at 23.25 Ksh average price, it was valued 465 times its nominal value of just 0.0...
Read more