Corporate News
Mr Charles Ireland, EABL’s managing director. PHOTO | FILE
By MUGAMBI MUTEGI
In Summary
- EABL's latest annual report indicates that after about 10 years of minority ownership in Sen Tech Limited, the company divested in a move that earned it Sh50 million.
- The brewer says it gained Sh49.6 million in the divesture, booking the amount in its “other income” which tripled to Sh422.4 million in the year ended June.
East African Breweries Limited (EABL) has sold off its 20 per cent stake in a Ruaraka-based engineering firm from which it sources spare parts for its factories.
Its latest annual report indicates that after about 10 years
of minority ownership in Sen Tech Limited, the company divested in a
move that earned it Sh50 million.
Sen Tech supplies EABL’s subsidiaries Kenya
Breweries Limited and East African Maltings Limited with spare parts for
their equipment.
It also offers maintenance services to the general
beverage and packaging industry in the region, covering glass bottling,
canning, and plastic manufacturing equipment.
“The management 10 years ago thought it was a good
thing to have a stake in a company which was an important supplier for
EABL,” said Mr Charles Ireland, EABL’s managing director.
“We now think this is no longer necessary and that
is why we sold the shares. However, EABL shall still continue to source
equipment spares from Sen Tech and other suppliers as is the case now.”
“The proceeds on disposal amounted to Sh50 million
and the gain on disposal recorded in other income Sh49.6 million. This
entity is not listed and the amounts are not material to warrant
investment in complex valuation models.”
The brewer says it gained Sh49.6 million in the
divesture, booking the amount in its “other income” which tripled to
Sh422.4 million in the year ended June. This helped raise its net profit
five per cent to Sh6.8 billion in the period.
EABL noted that Sen Tech is a private firm and that
disposing of the 20 per cent stake did not warrant complex valuation
models since the amounts are not material.
The divestiture from Sen Tech is part of the
changes that the brewer has made to its operations in the past year as
it seeks to improve efficiency and cut costs.
EABL has also adopted a leaner management
structure, reduced production of the low-cost beer brand Senator, and
deepened the use of Aluminium cans for packaging exports
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