Guinness Nigeria and International Breweries recorded the most cost of sales ratio compared to peers in the nine months of 2024 due to foreign exchange crunch and logistics cost, BusinessDay analysis shows.
The cost of sales ratio is a financial metric that measures the proportion of a company’s revenue that is used to produce goods or services. It is calculated by dividing the cost of sales by the total revenue and multiplying the result by 100.
Further analysis reveals that Guinness Nigeria Plc saw its input cost gulp 88.6 percent of total revenue, International Breweries recorded 72.4 percent while Nigerian Breweries and Champion Breweries recorded 70.5 percent and 59.1 percent respectively.
The cumulative revenue of the four brewers stood at N1.19 trillion from N653.5 billion while input cost also grew to N869.4 billion from N421.9 billion.
The four brewers saw their cumulative cost of sales gulp 72.8 percent of the total revenue which indicates 820 percent basis points increase from 64.6 percent. Manufacturers import some of their inputs and with naira devaluation, these costs have risen. Logistics cost is also a major challenge faced by brewers who have to transport goods from the factories to the markets.
Read also: Three brewers record N274.5bn loss on high costs
Firm analysis
Guinness Nigeria Plc
Guinness Nigeria saw its input cost gulp 88.6 percent of its total revenue in the first nine months of 2024 while input cost gulped 69.6 percent of total revenue in the same period of the previous year.
The firm’s revenue grew to N125.9 billion from N59.5 billion during the period reviewed while cost of sales grew to N111.6 billion from N41.4 billion.
After-tax loss stood at N12.2 billion in the nine months of 2024 from an after-tax profit of N2.59 billion in the same period of 2023.
Guinness Nigeria brews beer in Nigeria and packages and markets a range of international spirits, beers and ready-to-drink beverages. Well-known brands in its product range include Guinness Foreign Extra Stout, Guinness Extra Smooth, Malta Guinness and Harp Lager Beer.
Read also: Brewers incur retained losses as naira weakens
International Breweries
International Breweries saw its input cost gulp 72.4 percent of its total revenue in the first nine months of 2024 while input cost gulped 68.8 percent of total revenue in the same period of the previous year.
The firm’s revenue surged to N343.4 billion from N183.8 billion during the comparable periods. Cost of sales grew to N248.6 billion from N126.4 billion.
After-tax loss deepened to N112.8 billion in the nine months of 2024 from an after-tax loss of N28.6 billion in the same period of 2023.
International Breweries Plc is a brewery in Nigeria which brews, packages and markets a range of beer and non-alcoholic malt beverages. The company is known for its beer sold under the Trophy brand name and non-alcoholic malt drink sold under the Betamalt brand name, namely Trophy Lager, Trophy Black and Betamalt malt drink.
Nigerian Breweries
Nigerian Breweries saw its input cost gulp 70.5 percent of its total revenue in the first nine months of 2024 while input cost gulped 62.02 percent of total revenue in the same period of the previous year.
The brewer’s revenue surged to N710.9 billion from N401.8 billion. Cost of sales grew to N500.9 billion from N249.2 billion.
After-tax loss deepened to N149.5 billion in the nine months of 2024 from an after-tax loss of N57.2 billion in the same period of 2022.
Nigerian Breweries Plc, is the largest brewing company in Nigeria. It serves the Nigerian market and West Africa.
Champion Breweries
Champion Breweries saw its input cost gulp 59.06 percent of its total revenue in the first nine months of 2024 while input cost gulped 58.9 percent of total revenue in the same period of the previous year.
The brewer’s revenue grew to N14.02 billion from N8.36 billion during the period reviewed while cost of sales increased to N8.28 billion from N4.92 billion.
After-tax profit amounted to N386.7 million in the nine months of 2024 from an after-tax loss of N77.69 million.
Champion Breweries Plc is a brewery in Nigeria, established on July 31, 1974, with its headquarters in Uyo, Akwa Ibom State. The company is renowned for its production and marketing of Champion Lager Beer and Champ Malta.
Additionally, it provides contract brewing and packaging services to Nigerian Breweries Plc, aligning itself with the Heineken group’s global standards.
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