**Keo plc Reports Decline in First-Half Profits Amidst Improved Margins**
Cypriot beverage company Keo plc has reported a decrease in its first-half profits for 2026, with net earnings falling to €2.97 million, down approximately 8% from €3.23 million during the same period in 2025. This decline in profit is attributed to weaker sales, which have impacted the company's operating earnings, despite an improvement in its gross profit margin.
The company’s turnover also saw a decline, dropping by 3.13% to €32.4 million from €33.4 million a year earlier. This trend of softer sales has been a consistent theme for Keo over the past year, reflecting challenges in the market.
Despite the downturn in profits and turnover, Keo managed to enhance its gross profit margin, which increased to 34.9% compared to 33.9% in the previous year. The gross profit remained relatively stable at €11.3 million, indicating that while sales volume may have decreased, the company was able to maintain pricing power or reduce costs effectively.
However, the positive margin improvement was not sufficient to offset the decline in profit from operations, which fell to €2.5 million from €2.9 million in the first half of 2025. This marks a continuation of the trend observed in the previous year, when Keo reported an operating profit of €8.8 million for the entirety of 2025, down from €9.3 million in 2024. The company attributed the earlier decline to the absence of a one-off sales agreement that had positively influenced the previous year's figures.
Keo plc, based in Limassol, is involved in various beverage production activities, including beer and wine production, juice manufacturing, and the bottling of natural mineral water for both domestic and export markets. The company also imports and distributes a range of beverages, including beer, wine, spirits, juices, and bottled water within Cyprus.
In a recent announcement, Keo's board indicated that it would convene on September 22 to review and approve the unaudited interim accounts for the six months ending June 30. This meeting follows a series of corporate developments over the summer, including the successful completion of a €1.69 million dividend payment to shareholders in August. This dividend, equivalent to four cents per fully paid share, was approved by shareholders in July and was funded from Keo’s profits from 2024.
Looking ahead, Keo is progressing with plans for a new €25 million beverage factory in Kato Polemidia, which recently passed environmental screening. The environmental authority determined that a full impact assessment was not necessary for the project, although Keo still needs to secure the remaining permits before construction can commence. The new facility is expected to take approximately two years to complete and will focus on juice packaging, wine processing, bottling, and spirits production, while complementing the existing winery in Mallia.
As Keo navigates these challenges, the company remains focused on its core operations and strategic growth initiatives, aiming to enhance its market position in the competitive beverage industry.