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East African Breweries H1 pretax profit down 8 pct
poundfoolish
#21 Posted : Wednesday, February 17, 2010 8:47:27 AM
Rank: Elder

Joined: 12/2/2009
Posts: 2,458
Location: Nairobi
Govt shouls stop imposing this other side-irrelevant taxes on its cash cows(EABL)...
Wacha watu wanao kunywa wakunywe, wakisha kunywa the Govt can trust EABL to give it its fare share of taxes..rather than people rushing for lethal stuff..
wasee
#22 Posted : Wednesday, February 17, 2010 8:55:01 AM
Rank: Member

Joined: 2/5/2010
Posts: 273
Location: NBI
Remember this {"Hata mkizima stima tutakunywa"--the guy who went blind after taking kumi kumi!} Govt knows that even if they increase taxes wakunywa watendelea kukunywa. EABL, Keroche etc will always be cashcows!!
2012
#23 Posted : Wednesday, February 17, 2010 9:00:48 AM
Rank: Elder

Joined: 12/9/2009
Posts: 6,592
Location: Nairobi
[/quote]
65% tax vs innovation?
Innovation can't beat 65% tax...
Only option EABL has is asking the government to enforce the 'law' against untaxed brews...
[/quote]

All I'm saying is if they found a way of tapping into the illicit brew drinkers the govt. I'm sure will be willing to listen. The last time I heard eabl lobby for anything was the withdrawal of that alchoblow gadget from the roads.
I know they have done cheaper innovative brews like Senator and Kane but that was almost 10yrs ago. They now have new challenges that need new solutions because I doubt the person taking changaa for 10bob with a kick like a mule will buy a feather touch drink like a Senator mug for 30/-

BBI will solve it
:)
Chaka
#24 Posted : Wednesday, February 17, 2010 9:01:47 AM
Rank: Elder

Joined: 2/16/2007
Posts: 2,114
@Wasee,
Before they guy went on to expound..his first question was 'nani amezima stima? LOL
There was a potent drink called sorghum sake many years ago by one kuguru foods and may be EABL should have bought the business?
VituVingiSana
#25 Posted : Wednesday, February 17, 2010 9:17:01 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Spirits are taxed on their strength (alcohol volume) aka 'proof'... so making a 'stronger' spirit (kumi kumi style) attracts higher taxes...

Like I said, you can try all you want but as long as the taxes are higher than the cost of production of the 'illicit' stuff... how can a tax-paying entity compete?

BTW, GoK saw the light & reduced taxes on spirits so EABL had better 2Q & expects a decent 2H
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
bkismat
#26 Posted : Wednesday, February 17, 2010 10:53:31 AM
Rank: Elder

Joined: 10/23/2009
Posts: 2,375
muganda wrote:
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.

That is a lot of excuses from the CEO.The main reason why the profits are down is because of reduction in disposable incomes.
It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt...
-Mark Twain
2012
#27 Posted : Wednesday, February 17, 2010 1:07:17 PM
Rank: Elder

Joined: 12/9/2009
Posts: 6,592
Location: Nairobi
bkismat wrote:

That is a lot of excuses from the CEO.The main reason why the profits are down is because of reduction in disposable incomes.


His first blander was losing the Safari7s to his biggest competitor.

BBI will solve it
:)
sparkly
#28 Posted : Thursday, February 18, 2010 3:43:10 AM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
EABL currently trading at a PE of 16.6 is IMHO overpriced as compared to its closest peers like Bamburi and MSC in ind sector. The latter 2 show great growth potential. Investors are used to double digit growth on this counter. They have not fully digested the fact that such growth is a thing of the past, unless EABL comes up with a new killer strategy. Being a darling of the foreignors, I dont expect the price to fall significantly immediately. Once the foreignors stop buying though, the stock should not trade at anything above 125.
Life is short. Live passionately.
dukawalla
#29 Posted : Thursday, February 18, 2010 5:39:43 AM
Rank: New-farer

Joined: 12/1/2009
Posts: 16
Location: Nairobi
I have always wondered why barley should be grown in Kenya, malted in Kenya, fermented in Kenya, bottled in Kenya and drunk by Kenyans... then >70% of profits taken to the UK. – Just because Diageo owns more than 70 % shareholding in this company directly and / or through proxies.

KBL and now EABL have had a very successful advertisement campaign over the years...appealing to the Kenyans and selling itself as a true Kenyan product. Unfortunately over the same period of time ownership, management and control of this former gem has slowly eluded us Kenyans.

It has also puzzled me that the most profitable company for a long time has been a beer manufacturing company and not an IT related company or a manufacturing company.

There is nothing illicit about beer or alcohol brewed at home. In many developing countries the large percentage of beer consumed is from small family owned establishments and from microbreweries – the multinationals only control a small chink of those markets.

Come to Kenya – my theory has been that these multinationals through their connections in governments, influence and money have managed to convince everyone including our legal system that any beer brewed outside their premises are illegal, dangerous and illicit. ALL ALCOHOL IS ILLICIT!!! Including theirs if we are to view brewing by this eye.

Given the necessary support, tax breaks, regulations.... the mama pima who sells “machozi ya samba”at mbotela would now have been a force to reckon with – she would even probably have listed her company at the NSE, JSE or LSE if not NYSE.

After all the Japanese have sake, Ugandans have Waragi etc.... it is time that we supported companies that have real business ethics.
guru267
#30 Posted : Thursday, February 18, 2010 6:23:15 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
dukawalla wrote:
Unfortunately over the same period of time ownership, management and control of this former gem has slowly eluded us Kenyans.

There is nothing illicit about beer or alcohol brewed at home. In many developing countries the large percentage of beer consumed is from small family owned establishments and from microbreweries – the multinationals only control a small chink of those markets.


@dukawala
firstly let me remind you that kenyans were given a chance to buy into this firm but none or very few had any faith in it... now its milking money and we all want in..

secondly all that is asked of family businesses is to register as businesses, pay taxes and pass KEBS requirements.. nothing more, nothing less

Mark 12:29
Deuteronomy 4:16
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