East African Breweries Falls to Six-Week Low: Nairobi MoverEric Ombok
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.