Diageo’s Kenyan Unit Falls Most in Four Years: Nairobi Mover
Diageo Plc (DGE)’s Kenyan unit, East Africa’s biggest beermaker, dropped the most in more than four years on bets financing costs cut full-year profit by as much as 27 percent.
East African Breweries Ltd. fell as much as 8.2 percent, the largest on a closing basis since February 2009, and traded 1.1 percent lower at 348 shillings by 2:03 p.m. in the capital, Nairobi. Almost 120,000 shares were traded, or 42 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 (SAB) and sold a similar shareholding it held in Tanzania Breweries to SABMiller. EABL now controls 100 percent of its Kenyan unit.
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