• Friday, March 29, 2024
businessday logo

BusinessDay

Beta Glass Q3 profit hits N3.91bn amid plans to expand furnace capacity

Beta-Glass

Glass maker, Beta Glass Plc reported 14.18percent uptick in sales to N21.9bn in third-quarter result for the period ended 30th September 2019  from N19.18bn same period in 2018. Interestingly, the third quarter was particularly strong with a 24percent growth in sales to N7.5bn.

Beta Glass keeps costs down with selling and distribution expenses as well as admin expenses declining by 14percent and 30ercent respectively.

Operating profit grew by 17 percent in the nine months to N4.85bn and by 49percent in the third quarter alone.

From its revenue within this period, it generated N19.98bn from local sales of products majorly bottles and glassware while N2.01bn was generated from export sales as compared to N775.71mn realised in the same period in 2018.

Foreign exchange gain increased by 21percent in nine months, with much of it coming in the third quarter with a 245percent increase.

Net profit surged 10.7percent to N3.9bn from N3.53bn the same period in 2018.

The company announced in early October that its $30m investment to expand the furnace capacity at its plant in Agbara, Ogun State was on track to be completed in June 2020. The new furnace when completed will pioneer use of the Narrow Neck Press and Blow (NNPB) Technology in West Africa, enabling Beta Glass to bring lighter weight, non-returnable glass bottles to the market in Nigeria for the first time.

Analyst say Beta Glass impressive performance amid a tough macroeconomic environment validates management and board of directors’ focus and market penetration strategies.

Shrinking wallet among consumers, insecurity in the northern part of the country, decrepit infrastructure, high incidence of smuggling, counterfeiting locally manufactured products and the menacing gridlock at the Apapa Ports have made it practically difficult for manufacturers to make profit or bolster margins as amid sky-high cost of production.

Other challenges bedeviling the industry are high excise duties on products, exorbitant cost of haulage, and congestion at the Lagos seaports arising from the non-functionality of other seaports in the country.

Beta Glass is a subsidiary of Frigoglass Industries Limited, exporting glass packaging materials to 13 countries. The company has manufacturing plants in Ughelli, Delta State, and Agbara, Ogun State, with three furnaces that exceed 600 tons of produced glass containers per day. Breweries account for 43 percent of its total glass unit sales while soft drinks constitute 29 percent. Wine and spirits make up 12 percent just as pharmaceuticals and cosmetics’ patronage is estimated at 16 percent.

 

OLUFIKAYO OWOEYE