This article may contain graphic and/or adult content unsuitable for minors and sensitive readers.
Johannesburg, Mar 22 (I-Net Bridge) - At the start of East Africa's corporate results season, company performance is surprising on the upside, suggesting that earnings projections may soon move higher.
That is according to pan-African financial services company Imara, after receiving results from two regional heavyweights, tobacco giant British American Tobacco Kenya and East African Breweries Limited.
"In the calendar year to early March, the Nairobi Stock Exchange showed gains of 5.7% in US dollar terms, principally driven by strong corporate earnings across all sectors," said John Legat, manager of the Imara African Opportunities Fund.
At British American Tobacco Kenya, sales rose 49% driven by both volumes and a favourable currency, leading to a rise of 75% in earnings per share.
"Cash generation was strong and more than financed capital expenditure (up 30% on 2010), volumes rose by 14% driven by the export and domestic markets. The outlook remains upbeat," Legat said.
East African Breweries reported better-than-expected interim earnings to the end of December. Turnover was up 35% and net earnings rose 38%. The company has increased its stake in Kenya Breweries to 100% and has divested its shareholding in Tanzania Breweries, whose numbers were not included in the interims.
"We are expecting further year-end and half-year announcements across Africa over the coming weeks. There can be no doubt that we will need to revise our expectations upwards on what we have seen so far - which is very encouraging for Africa given the situation elsewhere in the world".
