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East African Breweries H1 pretax profit down 8 pct
muganda
#1 Posted : Tuesday, February 16, 2010 2:09:34 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
After the departure of the Mahinda money making machine...

NAIROBI (Reuters) - Kenya's East African Breweries posted an 8 percent drop in first-half pretax profit, thanks to drought, the global downturn, weak local currencies and higher taxes on spirits in Kenya, its CEO said on Tuesday.

EABL's Chief Executive Officer Seni Adetu also told an investor briefing that the volume of beer and spirits sold fell 10 percent in the period to the end of December from a year earlier while turnover rose 3 percent.

The company maintained its interim dividend at 2.50 shillings per share and said the total payout would be 2 billion shillings.
Chaka
#2 Posted : Tuesday, February 16, 2010 2:21:09 PM
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Joined: 2/16/2007
Posts: 2,114
volume of beer and spirits sold fell 10 percent
Did keroche industries contribute to the above?
VituVingiSana
#3 Posted : Tuesday, February 16, 2010 2:51:28 PM
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Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Main drop due to taxes (not Keroche though I am sure that helped a little)...

2H will be better since taxes have been reduced... 1Q sales of spirits down 50%...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
muganda
#4 Posted : Tuesday, February 16, 2010 3:01:42 PM
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Joined: 9/15/2006
Posts: 3,907
@VituVingiSana, sale of spirits down 50%? That's concerning - where did the customers go or what did they switch to?

On another note maybe they should tread carefully vis-a-viz the whole SABL issue. Now see that EABL may be more vulnerable, than I thought, to a full blown out war.
simonkabz
#5 Posted : Tuesday, February 16, 2010 3:36:38 PM
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Location: Cameroon
Keroche is a big threat with its cheap spirits n summit.
TULIA.........UFUNZWE!
VituVingiSana
#6 Posted : Tuesday, February 16, 2010 3:40:13 PM
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Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
muganda wrote:
@VituVingiSana, sale of spirits down 50%? That's concerning - where did the customers go or what did they switch to?

On another note maybe they should tread carefully vis-a-viz the whole SABL issue. Now see that EABL may be more vulnerable, than I thought, to a full blown out war.

Press release said 1Q sales of spirits down 50%. I have reduced my intake of spirits... & when possible I get them duty free (often non-EABL) thru friends flying in...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
VituVingiSana
#7 Posted : Tuesday, February 16, 2010 3:42:04 PM
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Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
simonkabz wrote:
Keroche is a big threat with its cheap spirits n summit.

Only way to confirm would be if Keroche released numbers too... IMHO, they are hurting even more than EABL is...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
sparkly
#8 Posted : Tuesday, February 16, 2010 7:53:59 PM
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Joined: 9/23/2009
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Location: Enk are Nyirobi
I humbly submit that the reduced sales are a result of the death of the 'social drinker'. This is the working class man/woman who will join his/her friends on a friday or over the weekend for a drink, catch up or rave. They typicaly take tusker malt/ smir ice or redds. They are generous and will buy a round or 2 for the pals. Now since booze hit 150-200 in places where they visit, boozing became quite expensive. For them booze is not No. 1 Priority neither are they willing to bend backwards to take senator. So they quit booze. EABL can rediscover 2x growth if they introduce cheaper but trendy products for this class.
Life is short. Live passionately.
TUPAC
#9 Posted : Tuesday, February 16, 2010 8:32:20 PM
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Joined: 12/8/2009
Posts: 274
Location: Ltktk
@sparkly I think EABL can achieve volumes and more profit if they can ensure that their products are sold at recomended or reasonable prices. i dont see why on earth i should pay 200bob for a beer whose recomended price is 85bob. why waste a whole 115bob? am i an MP? you see it makes no sense to work hard only for your sweat to be enjoyed by the beer proprietors!
...things fall apart...the centre cannot hold..mere anarchy is loosed upon the world...w b yeats
gathinga
#10 Posted : Wednesday, February 17, 2010 5:54:38 AM
Rank: Veteran

Joined: 11/30/2006
Posts: 635
sparkly wrote:
e. EABL can rediscover 2x growth if they introduce cheaper but trendy products for this class.



In Kenya and more so in the market you are alluding to, products are considered trendy of they are more expensive than other products. So this would be a catch 22 situation.I dont think there is significant opening for growth in the top end market. Me thinks the future of EABL top line growth lies in the 40% un-penetrated regions in Kenya that Adetu spoke of during the press interview. Coming to think of it, how comes senator has not penetrated 40% of Kenya, more than 6 years since its launch? Mobile phone companies, invest more in building networks in rural areas than EABL does in establishing distribution presence. Adetu should address this!
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