In a year blighted by the Covid-19 pandemic that necessitated an almost total lockdown of both economic and social activities, Nigerian beer makers were worse-off in 2020 yet than they have been in the past six years
Beer makers in Nigeria posted their biggest loss in six years after sales of alcoholic drinks plunged in 2020 on the back of the closure of bars, restaurants, clubs, hotels and other social spots across the country in the first half of last year.
The beer makers surveyed by BusinessDay include Nigerian Breweries, International Breweries and Guinness Nigeria.
The three companies posted a combined loss of N16.4 billion in 2020 wider than in 2019 when they made a combined loss of 7.5 billion.
The beer maker’s sales combined plunged to N582.2 billion in 2020 from N587.2 billion in 2019 due to weaker demand from consumers who have been hit by declining purchasing power and rising inflation.
Most recent data by the National Bureau of Statistics (NBS) shows inflation accelerated to 17.3 percent in February, the highest in four years.
Cost of sales also grew 2.4 percent t0 N401 billion from N391.4 billion. Although this was a meagre increase in cost, the beer companies found the record loss impossible to avoid.
As a way of curbing the spread of the virus, Africa’s biggest economy enacted a tw0-month lockdown, bringing all social activities to a halt.
The ban in social activities affected the revenue of beer makers given that the bulk of their sales come from bars, hotels, nightclubs, all of which were the most affected sectors from the lockdown.
The combined gross profit of beer makers dipped 7.5 percent to N181.2 billion compared to N196 billion in the periods under review.
Nigerian Breweries
Despite the difficult year, Nigeria’s biggest brewery, Nigerian Breweries, made a profit of N7.36 billion in 2020, although this was a 54 percent decline from 2019 when it made a profit of 16.1 billion.
Revenue grew 4.3 percent to N337 billion in 2020 from N323 billion in 2019.
Cost of sales grew 13.8 percent to N218.3 billion in 2020 from 191.7 billion the previous year.
Gross profit plunged 10 percent to N118.6 billion from 131.2 billion the previous year as a result of the increase in sales cost.
Borrowing cost also plunged 5.3 percent to N246.2 million from N260 million in 2019.
Nigerian Breweries’ stock remained flat at N48.50 per share, Friday.
International Breweries
Though an improvement from its loss position of N27 billion in 2019, International Breweries made a loss of N12.3 billion in 2020.
Revenue grew 3.3 percent to N136.7 billion in 2020 from N132.3 billion the year before.
Cost of sales declined 1 percent to N106.3 in 2020 from 107.1 billion the previous year.
Gross profit jumped 20.6 percent to N30.4 billion from N25.2 billion the previous year.
The brewer slashed borrowing cost by 79 percent to N3.17 billion from 15.1 billion in 2019.
International Breweries shares closed 2.70 percent lower at N5.70 per share, Friday.
Guinness Nigeria
Guinness Nigeria posted a loss of 11.4 billion in 2020 from a profit of 4.12 billion in 2019.
Revenue tumbled by 18 percent to N108 billion in the period under review from N132 billion recorded the year before.
Cost of sales declined by 17.5 percent to N76.3 billion 2020 from N92.5 billion recorded in 2019.
Gross profit also dipped by 18.7 percent to N32 billion in the period under review compared to N39.4 billion.
Guinness Nigeria stock closed 9.89 percent higher at N30 per share on Friday.
