Financial analysts have been talking up a return to profitability for Nigerian Breweries Plc and other multinationals that were hit by a gale of foreign exchange headwind in the 2023 financial year.
This is coming as the company has announced strategic business recovery plans designed to return it to profitability following a loss of N106 billion in the 2023 business year, mostly as a result of the foreign exchange headwinds that occasioned a steep fall in the value of the Naira.
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The recovery plans, among which are the raising of N600 billion through rights issue, the inclusion of a whiskey portfolio in the basket of offerings, and the temporary closure of two of its nine breweries, are envisioned to return the business to the green columns.
Analysts have however been sharing their views on the future of the conglomerate in 2024, asserting that with a more stable foreign exchange market, the brewer, like most other big corporations will return to profitability in 2024,
Speaking on the impact of the naira exchange on corporate performance, the Managing Director and Chief Executive Officer of Lyceum Alliance Limited, a financial advisory and management consulting firm), Jekwu Ozoemena in a statement expects a positive economic outlook as the country’s currency continues to stabilize against the dollar and other major international currencies.
“If you look at the 2023 annual result of Nigerian Breweries, for instance, the company actually performed well on most critical performance indicators but was shaken off the profits path by the external factor naira devaluation. For example, this company recorded a significant growth in assets. It also made significant savings in the marketing side of the business, spending N51 billion in 2023 as against N57 billion in 2022. This means that the company, given all other factors, would have made more profits in 2023 than in 2022”, he stated.
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He however said that with the recent gains of the naira against the dollar, and the expected stability of the currency over the remaining months of the year, the expectations are that most companies operating in Nigeria that were adversely affected by the unstable periods of the naira will recover and return to profitability.
On the business recovery plans recently announced by the brewing giants, Ozoemene commended the bold initiatives, arguing that it was indicative of a management that is committed to retaining and rewarding the trust of its shareholders.
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