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International Breweries high input costs persist as loss piles

International Breweries high input costs persist as loss pile

International Breweries’ input cost rose to N175 billion in December 2022, the highest in five years as the firm records recurrent losses, BusinessDay analysis shows.

The brewery input cost recorded a 28.7 percent growth in 2022 from N136 billion in the full-year period of 2021.

Further analysis revealed that the firm has been recording losses which can be attributable to higher inflation as input cost surge as Nigeria’s headline inflation rate recorded double-digit growth of 21.34 percent in December from 21.47 in November.

International Breweries cost to sales ratio declined by 70 percent basis points to 103.28 percent in December 2022 from 103.98 percent in the same period of 2021.

International Breweries reported a loss for the year of N21.6 billion from N17.7 billion while the loss incurred before tax stood at N26.8 billion from N19.8 billion.

Loss attributable to shareholders recorded by International Breweries amounted to N21.6 billion in December 2022, this is coming from N17.6 billion in December 2021 which led to N0.81 loss per share from N0.66 loss per share in the comparable period.

International Breweries’ revenue grew to N218.65 billion from N182.3 billion indicating 20 percent growth during the period reviewed.

Revenue from local bought-in materials and services amounted to N75.7 billion, 42 percent of the total revenue reported by the firm while foreign bought-in materials and services stood at N104.6 billion which accounted for 58 percent of the total revenue.

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The firm’s administrative expenses rose to N31.5 billion in 2022, 12 percent increase from N35.9 billion in 2021 while marketing, promotion and distribution expenses stood at N19.4 billion, 10 percent increase from N17.7 billion in the comparable periods.

Trade and other payables grew 5.6 percent to N151.6 billion driven majorly by the amount due to related parties, trade payable and accrued expenses line item, compared with N143.6 billion in 2021.

Finance income stood at N5.2 billion in 2022, 73 percent increase from N3 billion in 2021 while finance costs amounted to N5.4 billion, 69 percent increase from N3.2 billion in the period reviewed.

Net foreign exchange loss stood at N8.36 billion in 2022, 107 percent increase from N4.04 billion in 2021.

International Breweries’ cash and cash equivalents increased to N36 billion in 2022, up 46 percent from N66.8 billion in 2021. The cash and cash equivalents consist of cash at bank which amounted to N28.8 billion and restricted cash which amounted to N7.2 billion.

The movement in the cash and cash equivalents grew 46 percent on the back of net cash inflow from operating activities which stood at N42.7 billion in 2022, a 107 percent increase from N52.04 billion in 2021.

Net cash outflow from investing activities amounted to a negative of N66.5 billion on the back of investment in call deposits, acquisition of property, plant and equipment from N86.5 billion one negative cash flow.

Net cash flow from financing activities stood at a negative of N6.9 billion on the back of repayment of principal on borrowings, lease payments and interest paid on borrowing, this is coming from a positive of N50.4 billion in the period reviewed.