EABL FY2025 Performance Review and Dividend Outlook

Company Overview

East African Breweries PLC (EABL), a subsidiary of Diageo, is the largest alcoholic beverages company in East Africa, operating across Kenya, Uganda, and Tanzania. The company produces and distributes beer, spirits, and non-alcoholic beverages, maintaining market leadership through strong brand equity and extensive distribution networks.

Regional Coverage

Kenya – Core market contributing the largest share of revenue and profit.
Uganda – Stable growth supported by beer and premium spirits.
Tanzania – Recovery market showing improved performance after previous headwinds.

These three regions collectively anchor EABL’s performance, accounting for over 90% of total revenue, with exports and other markets supplementing growth.

Financial Strength and Dividend Support

The Statement of Cash Flows for FY2025 shows solid liquidity and disciplined cash management:

FY2025 Cash Flow Snapshot (in KSh Billion)

Cash generated from operations	35.65
Interest payments	5.86
Tax payments	6.03
Net operating cash inflow	23.77

Allocation of funds:

Dividend payments – KSh 6.83 billion
Capital investment – KSh 6.48 billion
Debt reduction – KSh 8.82 billion

Despite these significant outflows, the company ended the year with KSh 12.74 billion in cash reserves, up from KSh 10.82 billion in FY2024 — reflecting healthy cash generation and financial prudence.

This confirms that EABL’s dividend is fully funded by internal operations, not external borrowing. Borrowings decreased from KSh 49.7 billion in FY2024 to KSh 42.3 billion in FY2025, signaling stronger balance sheet health.

Dividend Yield and Sustainability

EABL’s dividend payout policy remains consistent and sustainable, with dividend cover comfortably above 2× based on earnings and cash flow. While the yield varies with share price, it remains attractive — averaging 5–6%, comparable to leading blue-chip counters on the NSE.

Given EABL’s robust free cash flow and reduced debt, future dividends appear secure and positioned for moderate growth aligned with profit recovery and currency stability.

EABL as a Growth and Wealth-Building Stock

Beyond dividends, EABL offers investors a blend of income and capital growth potential. Key drivers include:

Operational Efficiency: Cost control, premiumization, and energy efficiency protect margins.
Debt Reduction: Lower finance costs free up cash for reinvestment and shareholder rewards.
Brand Innovation: Expanding spirits and low-alcohol lines to match evolving consumer tastes.
Regional Diversification: Growth in Uganda and Tanzania balances Kenya’s market cycles.
Digital Transformation: Tech-driven marketing and distribution improve reach and insight.
Economic Recovery: Regional GDP growth (5–6%) supports rising consumer spending.

Together, these strengths make EABL a hybrid stock — offering income stability through dividends and upside potential from long-term expansion.

Projections for Future Growth

Analysts expect medium-term revenue growth of 8–10% annually, driven by volume recovery, inflation-adjusted pricing, and growth in premium categories. Maintaining current capital discipline could yield total shareholder returns (TSR) of 12–15% per year — combining dividend yield and capital appreciation.

Conclusion

EABL’s FY2025 performance underscores its financial resilience, sustainable dividend policy, and strong regional strategy. By funding dividends internally, reducing debt, and driving innovation, EABL cements its position as one of East Africa’s most reliable wealth-building companies.

Bottom Line: EABL remains a flagship blue-chip — a rare mix of steady dividends, solid cash flows, and growth momentum. For investors eyeing long-term value, it’s both a foundation stock and a reliable income generator.

📊 Snapshot Reference: FY2025 Condensed Statement of Cash Flows (Extracted from EABL Press Release)

Cash generated from operations .......... 35,651M  
Net interest paid ......................... (5,859M)  
Income tax paid ........................... (6,025M)  
Net cash from operating activities ........ 23,767M  
Purchase of property, plant & equipment ... (6,441M)  
Dividends paid ............................ (6,830M)  
Net movement in borrowings ................ (8,817M)  
Net increase in cash & equivalents ........ 1,640M  
Closing cash balance ...................... 12,744M