East African Breweries Plc (EABL) has posted a 49 per cent rise in annual net profit amid a challenging operating environment.
The brewer has reported a profit after tax of Sh18.2 billion for the financial year ended June 2026, up from Sh12.2 billion a year earlier, supported by double-digit revenue growth, tighter cost controls and lower financing expenses.
Revenue increased by 13 per cent to more than $1.12 billion (about Sh146 billion), prompting the company to recommend a final dividend of Sh8.70 per share.
This brings the total annual dividend to Sh12.70 per share, representing a 59 per cent increase from the previous financial year.
The improved earnings came despite a Sh1.2 billion foreign exchange loss, largely attributed to the weakening of the Kenyan shilling against the British pound and the euro, currencies in which the company settles payments for a significant portion of its imported raw materials.
EABL Managing Director Jane Karuku said the brewer also contended with supply chain disruptions linked to geopolitical tensions in the Middle East, rising food inflation and escalating production costs during the year.
“Disciplined cost control, productivity improvements and lower finance costs cushioned the impact of the external shocks,” Ms. Karuku said.
Operating profit before foreign exchange movements grew by nearly 34 per cent, reflecting improved operational efficiency even as external pressures persisted.
Debt reduction cuts finance costs
The brewer’s profitability was further supported by a stronger balance sheet after it reduced total borrowings by nearly Sh6 billion during the year.
Outstanding debt fell from approximately Sh39 billion to Sh33 billion, helping lower finance costs by Sh1.5 billion and easing pressure on earnings.
Speaking during the release of the annual results, Ms. Karuku said the company had operated in a difficult macroeconomic environment characterised by geopolitical uncertainty, pressure on household incomes and evolving consumer preferences.
She noted that although consumers remained financially constrained and continued shifting towards lower-priced products, demand for flavoured alcoholic beverages and premium brands continued to rise, presenting opportunities for product innovation and premiumisation.
Regional markets drive growth
Growth across regional markets strengthened EABL’s overall performance, reducing its dependence on the Kenyan market.
Uganda recorded a 16 per cent increase in revenue during the year, while Tanzania posted a 44 per cent jump as the market continued to recover.
Kenya, which accounts for about 60 per cent of the group’s business, registered five per cent revenue growth.
The company said the stronger contribution from regional operations validated its long-term diversification strategy and enhanced earnings resilience.
Across its product portfolio, beer volumes increased by nine per cent, supported by a more favourable excise tax environment.
Mainstream spirits recorded a 30 per cent expansion, driven by new product launches and flavoured offerings targeting younger consumers.
Premium beer and premium spirits each registered nine per cent growth, reflecting sustained demand for higher-value products despite pressure on household spending.
The brewer also strengthened its cash position during the year, generating Sh42 billion from operating activities, an 18 per cent increase from the previous year.
The higher cash generation enabled the company to finance capital investments, reward shareholders through higher dividend payouts and continue reducing debt.
Free cash flow rose to approximately Sh22 billion, up from Sh17 billion a year earlier, reinforcing EABL’s financial flexibility as it positions itself for sustained regional growth despite continued macroeconomic headwinds.
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