International Breweries Plc reported its lowest loss in five (5) years in the first nine months (9M) of 2022, when it decreased by 79.93 percent to N 2.8 billion from N-14 billion in the first nine months of 2021.
This was despite revenue reported by the beer maker being the highest in ten (10) years amounting to N160.4 billion in the nine-month period of 2022, up 13.91 percent from N128.4 billion in the nine-month period of 2021.
However, on a quarterly basis, revenue was down by 9 percent to N49.03 billion in the third quarter (Q3) of 2022 from N53.88 billion in the second quarter (Q2) of 2022.
Cost of sales claimed 71 percent of the manufacturer’s total revenue during the period and amounted to N113.47 billion in the nine-month period of 2022, up 13.91 percent from N99.61 billion in the corresponding period of 2021.
The firm’s managing director, Hugo Dias Rocha stated that “despite the difficult quarter, we remain focused on our winning commercial strategy. Year-to-date, our brands remain resilient and continue to deliver net revenue growth.”
“Top-line grew by mid-single digits (5.6 percent) driven by revenue management initiatives. Gross profit and margins declined on elevated costs largely due to higher energy prices, FX illiquidity, commodity cost headwinds, severe weather, and overall inflationary pressures. We remain EBITDA positive on the back of prudent resource allocation and cost management,” he added.
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Operating expenses (OPEX) grew marginally by 1.17 percent to N45.09 billion in the nine-month period of 2022 from N44.57 billion in the nine-month period 0f 2021, on the back of a 25 percent surge in administrative, marketing, and promotion expenses.
Further analysis of the other expenses reported by the beer maker shows a 92 percent surge in net foreign exchange loss to N6.59 billion in the nine-month period 0f 2022 from N3.43 billion in the same period last year.
Due to the interest hikes during the period, finance income, and finance costs reported by International Breweries Plc surged by 374 percent and 274 percent to N2.79 billion and N7.11 billion respectively in the nine-month period of 2022.
The beer maker’s total assets increased to N414.97 billion in the nine-month period of 2022 from N403.46 billion in the nine-month period of 2021, while its total shareholder’s fund declined by 4.59 percent to N135.79 billion in the nine-month period of 2022 from N142.32 billion in the corresponding period of 2021.
Cash and liquid cash (cash equivalents) held by International Breweries were down by 69.83 percent in the nine-month period of 2022 to N24.85 billion from N82.38 billion in the nine-month period of 2021.
Cash flow from operations during the period was positive during the period amounting to N20.38 billion, indicating that the firm generated enough cash to cover its short-term liabilities during the period. However, the cash generated during the period was 50 percent lower than the N41.41 billion reported in the first nine months of 2021.
Net cash flow from investing activities was positive totaling N5.13 billion largely due to investments in debt securities and interests received in the nine-month period of 2022.
Net cash flow from financing activities amounted to N-67.24 billion, due to repayments of borrowings and interests paid during the period.
