Diageo’s Kenyan Unit EABL Says Profit Fell by More Than 25%Sarah McGregor
East African Breweries Ltd., Diageo Plc’s Kenyan unit, said profit for the year ended June fell more than 25 percent as a result of higher financing charges and because a one-time gain a year earlier wasn’t repeated.
EABL took a loan in November 2011 to buy a 20 percent stake in Kenya Breweries Ltd. from SABMiller Plc and sold a similiar shareholding it held in Tanzania Breweries to SABMiller. EABL’s net gain in the one-time transaction was 3.6 billion shillings ($41.2 million) for the year through June 2012, the company said today in a statement e-mailed by the Nairobi Securities Exchange.
“The EABL Board is confident that the company will return to net earnings growth for the 2014 fiscal year,” it said.
In addition, the interest on that loan now covered a full year of trading, compared with seven months for the prior fiscal year, the company said. Net sales probably climbed in fiscal 2012-13 from a year earlier, EABL said. The full results will be released Aug. 23.
First-half profit through December dropped 18 percent to 3.76 billion shillings as financing costs more than tripled, the company reported in February.
EABL, Kenya’s second-biggest company by market value, gained 0.9 percent to 349 shillings by the 3 p.m. close of the stock exchange. The company issued its profit warning after the market closed.