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Diageo’s Kenyan Unit Falls Most in Four Weeks: Nairobi Mover

July 29 (Bloomberg) -- Diageo Plc’s Kenyan unit, East Africa’s biggest beermaker, dropped the most in almost four weeks on bets financing costs cut full-year profit by as much as 27 percent.

East African Breweries Ltd. declined 1.7 percent, the largest retreat since July 2, to 346 shillings by the close in the capital, Nairobi. Almost 122,000 shares were traded, or 46 percent of the three-month daily average volume.

The company’s fiscal year ended June 30 and the median estimate of seven analysts surveyed by Bloomberg forecasts adjusted net income will be 8.18 billion shillings ($93.6 million). That compares with profit of 11.2 billion shillings reported a year earlier.

“In the just-ended fiscal year the company paid interest over 12 months compared to seven months the previous year and this will affect full-year profit,” Timothy Wambu, head of research at Nairobi-based NIC Securities Ltd., said by phone.

First-half profit through December dropped 18 percent to 3.76 billion shillings as financing costs more than tripled, it said in February. EABL 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: Vernon Wessels at vwessels@bloomberg.net

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