The EABL share shed 6.8 percent in trading on Friday at the Nairobi Securities Exchange (NSE) after the brewer halved its dividend for the financial year that ended in June compared to the previous period.
The company closed at Sh153.50 a share, from Sh164.50 on Thursday, although on relatively thin trading having moved 11,800 shares on the day.
The company had earlier in the day announced a 20.8 percent drop in net profit for the year to Sh12.3 billion, largely attributable to an increase in indirect taxes, cost of sales and net finance costs.
As a result, the company recommended a final dividend of Sh1.75 per share, which when added to the interim payout of Sh3.75 per share brings a total of Sh5.5.
This is 50 percent below the distribution made in the year to June 2022, which comprised an interim dividend of Sh3.75 per share and a final one of Sh7.25 per share for an aggregate of Sh11.
The EABL stock is one of a group of large blue chips that have remained attractive due to a stable dividend payout policy allied with solid business fundamentals.
These stocks, which also include Safaricom, KCB and Equity Group, dominate trading in terms of turnover.
In the month running up to EABL’s results announcement, its share price had appreciated from Sh152 to Sh164.50, indicating that investors were anticipating a relatively unchanged dividend payout.
This was after half-year results (to December 2022) showed only a marginal profit fall to Sh8.7 billion from Sh8.73 billion a year earlier, which saw the company maintain its interim dividend at Sh3.75 per share.
In the second half of the year, however, performance was impacted by among others inflationary pressure that diminished consumers’ disposable incomes but also increased the cost of doing business.
