Nigeria’s third-largest listed brewer, International breweries (Interbrew), in the third quarter of the year saw a reduction in loss, helped by improved alcohol sales and reduced borrowing cost.
The bear maker reported a loss of N1.52 billion in the third quarter of 2020, 84 percent improvement from Q3’19 when it reported a loss of N9.6 billion.
“The reopening of bars, clubs and restaurants after the easing of lockdown measures have improved alcohol sales during the period under review,” a consumer goods analyst tell Businessday.
The brewer grew sales to N35.1 billion, up by 22 percent from N28.6 billion in Q3’19.
Hoever, despite the improved performance, shares of the firm was down 5.02 percent to close at N7 per share, Monday.
The improvement in performance is also traceable to a significant decline in borrowing cost as the brewery was able to deleverage in Q3’19.
Finance cost was down by 85 percent to N894 million from N6.1 billion in Q3’19.
As a result, the brewer’s loss before tax narrowed to N5.7 billion compared to a loss of N13.5 billion recorded in Q3’19.
Finance income also climbed 1191 percent to N15.5 million in Q3’19 against N1.2 million a year ago.
Cost of sales rose 18.7 percent to N29.1 billion in Q3 compared to N24.5 billion a year ago.
Gross profit grew 47.5 percent, to N5.9 billion in Q3’20 compared to N4.0 billion in Q3’19. This means the brewer made N17 per N100 sales, up from N14 in the same period of 2019.
The brewer spent less on marketing and promotion as the expense dropped by 43 percent to N3.1 billion compared to N5.4 billion a year ago.
Meanwhile, administrative expenses during the period climbed 6.1 percent to N6.9 billion from N6.5 billion in Q3’19.
Interbrew’s income tax credit rose 7.6 percent to N4.2 billion in Q3’19 compared to N3.9 billion recorded in the same period last year.
In the period, Interbrew made more money from the sale of waste and scrap, rising 970 percent to N25.7 million from N2.4 million in the previous year.
Sundry income also jumped to N878 million from N970 thousand in Q3’19.
The net impairment loss on the company’s financial assets in Q3’20 was 30.7 percent lesser than N455 million recorded last year. Impairment occurs when a business asset’s fair market value decreases more than its book value. The asset is revalued and a charge made to net assets.
International Breweries also reported a net foreign exchange loss of N1.3 billion in the period from a gain of N501 million in Q3’19.
Earnings per share (EPS) plunged 94.6 percent to N0.06 per share in Q3’19 from N1.12 per share in Q3’20.
For the 9 months period ended September 30, Interbrew’s loss narrowed by 34 percent to N10.8 billion from a loss of N16.4 billion recorded a year ago.
However, revenue dropped 1.54 percent to N95.7 billion in the first 9 months of the year from N97.2 billion in the same period last year.
Cost of sales also jumped 4 percent to N80.2 billion in 9m’20 from N77.1 billion in the same period last year.
International Breweries beer brands include Budweiser, Hero Lager, Trophy lager, Beta malt, among others.
