Brewers recorded negative retained earnings in the first half (H1) of 2024, indicating prolonged financial losses fuelled by the Nigerian challenging business environment.
BusinessDay analysis of four brewers listed on the Nigerian Exchange Group (NGX) reveals that three recorded a retained loss while one recorded retained earnings.
Champion Breweries, Nigerian Breweries and International Breweries collectively incurred retained losses amounting to N349.1 billion in H1 of 2024 while Guinness reported retained earnings of N81.9 billion.
However, Guinness Nigeria and Nigerian Breweries recorded retained earnings, which amounted to N40.5 billion.
Retained earnings are the net income left over for the business after it has paid out dividends to its shareholders, which is an equity account. Negative retained earnings often serve as indicators of prolonged financial losses, potentially foreshadowing bankruptcy. Such circumstances may also imply that the company disseminated borrowed funds to shareholders in the form of dividends.
Read also: Brewers in aggressive fund raising to reduce negative working capital
Firm analysis
Guinness Nigeria Plc
Guinness Nigeria Plc’s retained earnings increased to N46.4 billion in H1 of 2024 from N7.88 billion in the similar period of 2023.
But the firm recorded a loss for the year, which deepened to N54.8 billion from N18.2 billion. Revenue grew to N299.5 billion from N229.4 billion during the period.
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.
Champion Breweries
Champion Breweries recorded a negative retained earnings of N2.67 billion from zero in the previous year.
However, the firm posted other reserves of N3.7 billion in the same period of 2023.
After-tax loss amounted to N386.7 million, with an after-tax profit of N29.07 million. Revenue surged to N9.54 billion from N5.7 billion.
Champion Breweries Plc is a leading brewery in Nigeria, established on July 31, 1974, with its headquarters in Uyo, Akwa Ibom State. The company is renowned for the 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.
Read also: Nigerian brewers’ battle for market share heats up as headwinds grow
Nigerian Breweries
Nigerian Breweries recorded a negative retained earnings of N111.3 billion in H1 of 2024, from a positive retained earnings of N32.6 billion in the similar period of 2023.
After-tax loss deepened to N84.3 billion from N47.3 billion while revenue surged to N478.8 billion from N277.4 billion.
Nigerian Breweries Plc, is the largest brewing company in Nigeria. It serves the Nigerian market and West Africa.
International Breweries
International Breweries recorded a negative retained earnings of N235.1 billion in H1
of 2024 from a negative retained earnings of N81.9 billion in the same period of 2023.
After-tax loss deepened to N106.8 billion from N23.6 billion while revenue surged to N223.2 billion from N116.1 billion.
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.
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