Eveready profits rise as counterfeits lower revenue

By Karanja Njoroge

Eveready Batteries registered a 58 per cent increase in profit after tax compared to a corresponding period last year.

The firm's Managing Director Steven Smith, however, said there was a decline in the firm's revenue by seven per cent in response to the difficult trading environment.

Addressing shareholders during the company's Annual General Meeting in Nakuru, Mr Smith said the success was due to progress in controlling the cost of operations.

"Gross margin improved by three per cent compared to the last year as the benefits of the company realignment programme have started to bear result," he added.

The firm, Smith said has been coping with major changes, which have combined to create a challenging trading environment.

"The challenges relate to the influx and presence in the market of illegal and unfair competition," he said. He said the decline in sales performance reflects a difficult year for Eveready.

The most significant influence on revenue reduction was the effects of proliferation of cheap, illegal and substandard dry cells/batteries in the local market.

Economic shocks

"A slowing economy compounded by famine also negatively affected on the firm's ability to sell products in the lower market segment," he told shareholders on Friday.

Smith said the company has invested to refurbish production processes, which are now well equipped to optimise production potential.

He said last years' results represent a major achievement against a challenging trading environment.

The firm's Chairman Moody Awori said the board decided not to declare a dividend for the year to conserve cash.

Source: The Standard | Online Edition