East African Breweries Falls to Six-Week Low: Nairobi Mover

East African Breweries Ltd., Diageo Plc’s Kenya-based unit and the region’s biggest beermaker, fell to the lowest in more than six weeks on bets full-year earnings through June will drop by as much as a quarter.

The stock declined 3.5 percent to 277 shillings by the 3 p.m. close in Nairobi, the lowest since Jan. 7. About 1.1 million shares or more than three times the three-month daily average were traded, according to data compiled by Bloomberg.

“There are quite a number of investors who were taken aback by the first-half numbers and those are the ones exiting,” Eric Musau, an analyst at Nairobi-based Standard Investment Bank Ltd., said in an interview. “We are looking at full-year earnings falling 20 percent to 25 percent.” The brokerage has a sell recommendation on the stock, Musau said.

The company, Kenya’s biggest by market value, said Feb. 15 first-half profit through December dropped 18 percent as financing costs more than tripled. Net income fell to 3.76 billion shillings ($43 million) in the six months through December from 4.88 billion shillings a year earlier.

EABL, as the company is known, took a loan last year to buy a 20 percent stake in Kenya Breweries Ltd. from SABMiller Plc and sold a similar shareholding it held in Tanzania Breweries to SABMiller. EABL now controls 100 percent of its Kenyan unit.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.