“We note that the brewer has significant exposure to foreign
currency payable,” said the analysts.
Data showed Nigerian Breweries recorded a loss of N47.6
billion in the first half of 2023 from a profit after tax of N18.74 billion in
the same period of 2022.
The firm’s revenue increased to N277.42 billion in H1 2023
from N274.08 billion in the same period of 2022.
Nigerian Breweries reported a loss on foreign exchange
transactions which stood at N70.62 billion in the second quarter of 2023 from
N5.4 billion in Q2 2022.
“The second quarter of 2023 was significantly impacted by
various factors including the effect of fuel subsidy removal on consumers,
naira devaluation and its effect on input cost, and mostly the revaluation of
foreign exchange obligations,” Nigerian Breweries noted in a recent statement
signed by Uaboi Agbebaku, company secretary/legal director.
“Together with the cash crunch which materially impacted the first quarter, the Company’s net loss was escalated in H1. Despite these challenges, we see a positive trend in the results from operating activities (operating profit) which improved by more than 100 percent in the 2nd quarter versus the same quarter in 2022, driven by pricing, premiumisation, and strong cost management.
Although the recent policy reforms are having a short-term
impact on businesses and consumers, we believe they are beneficial to the
long-term growth prospects of the country and the Company. The board remains
committed to creating long-term sustainable value for our Shareholders,”
Agbebaku stated.
Here are the highlights of Nigerian Breweries half year
financial books:
Debt restructuring by tenors
The management of Nigerian Breweries Plc is thinking outside
the box as they have expressed the intention to convert some short-term
obligation into long-term debt, according to Cordros Securities Limited.
“We note that the brewer has significant exposure to foreign
currency payable,” said the analysts.
There has been growing concern over the FX woes and mounting
debts of Nigerian companies who operate in a tough and unpredictable
macroeconomic environment.
Revenue/Sales
Nigerian Breweries revenue for the period stood at N277.42
billion in H1 2023 from N274.08 billion in the similar period of 2022.
“In the first half of the year (H1), net revenue grew by a
low single-digit driven by pricing to partially mitigate inflation and by
premiumisation. Premium beer volume was broadly stable while flavoured beer
grew in the low thirties, led by Desperados, which more than doubled in volume
versus the same period in 2022,” Agbebaku said.
Cost of sales
Nigerian Breweries’ cost of sales amounted to N165.09
billion in H1 2023 from N155.35 billion in the similar period of 2022.
Nigerian Breweries announces price hikes on all products in
a letter seen by BusinessDay. Nigerian Breweries said the price hike became
necessary due to the continued rise in input costs and the necessity to
mitigate its impact.
“This is to inform you that we will review the prices of
some of our SKUs (Stock Keeping Units) effective Thursday 10th August 2023.
This review has become necessary because of continued rising input costs and
the need to mitigate the impact,” the letter signed by Ayo Lawal, the company’s
sales director said.
Loss after tax in H1
Nigerian Breweries recorded a loss after tax of N47.6
billion in H1 2023 from a profit after tax of N18.74 billion in the same period
of 2022.
Cash and cash equivalent
Nigerian Breweries maintains liquidity with its cash and
cash equivalent at 282.6 percent growth to N34.93 billion in H1 2023 from N9.13
billion in H1 2022.
The movement in cash and cash equivalent reveals that net
cash from operating activities stood at N82.71 billion from N30.9 billion
negative cash flow while net cash used in investing activities stood at a
negative cash flow of N25.84 billion from N27.01 billion negative cash flow in
the comparable periods.
Net cash used in financing activities increased to N121.29
billion in the first half of 2023 from N50.39 billion in the same period of
2022.
Selling, distribution & administrative expenses
Selling and distribution expenses dipped to N68.46 billion
in the first half of 2023 from N69.8 billion in the similar period of 2022
while administrative expenses increased to N16.27 billion from N14.48 billion
in the comparable periods.
Net finance cost
Nigerian Breweries net finance costs stood at N96.22 billion
in the first half of 2023, an 844 percent increase from N10.19 billion in the
similar period of 2022.
Finance income dropped to N185.57 million in the first half
of 2023 from N228.74 million while finance costs increased to N11.15 billion
from N3.14 billion.
Earnings per share
Nigerian Breweries to a loss per share of N5.73 per share in
H1 2023 from an earnings per share of N2.32 per share in a similar period of
2022. - BusinessDay