EABL | East African Breweries HY24 Earnings Note

EABL Group trailed under the impact of varied macroeconomic headwinds to post a 22.1% y/y decline in net earnings to KES 6.78Bn over the six months to December 2023. Profitability margins were compressed by a faster surge in operating expenses relative to net sales growth, coupled with an elevenfold jump in foreign exchange losses over the period under review.

Management remains keen on margin expansion and deleveraging the balance sheet, despite the uncertain operating environment. Management hints at implementing stronger pricing action to push back against shrinking margins amidst shifting consumption patterns. Further, an impressive 29.8% growth in operating cashflows, increased the scope for lowering debt exposure amid a rising rate environment.

 

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