International breweries shows recovery following COVID-19
International Breweries Plc, a major brewer in Nigeria’s consumer goods industry and the third-largest listed brewer is showing signs of strained recovery following the impact of the Coronavirus pandemic, economic headwinds and shrinking consumer wallets
According to the information contained in the brewer’s audited full year 2020 financial results, the brewer’s revenue increased marginally by three percent moving from N132 billion to N136 billion in 2020.
Beyond the marginal increase in its revenue, the brewer managed to cut down its loss for the year by 56 percent, moving from N27 billion to N12.3 billion in 2020 and was also able to reduce its cost of sales by one percent to N106 billion in 2020.
According to the company’s report, a number of factors improved its financial performance despite the impact of the pandemic. This was visible in its finance income which surged to N1.5 billion in the period under review from N1.7 in million in the previous year.
The company’s gross profit was N 30.4 billion, representing a 21 percent increase from the N25.2 billion realized in 2019. Furthermore, its other income which constitutes proceeds from the sale of by-products, sundry income and royalty received for the production and sale of Beta Malt grew by 509 percent to N2.7 billion from a loss of N662 million.
In 2020, the brewer’s assets grew by two percent from N365 billion to N372 billion. Also it spent a total of N253 billion on property, plant, and equipment during the year.
International breweries mentioned in its report that it conducted a rights issue in February 2020 to deleverage its balance sheet. As a result, its total borrowings reduced to N110.7 billion from N263.6 billion in the previous year.
The company also revealed that it generated a positive operating cash flow of N52.2 billion during the year to cover its short-term responsibilities and is looking to explore more options to address its financial obligation, including settling its foreign-denominated liabilities and hedging instruments to mitigate foreign currency risks.
Despite the economic headwinds, the brewer did not cease its corporate social responsibility (CSR) activities, as it spent N323 million during the year.
At the close of trading on Friday, the company had a share price of N5.70 per share with year-to-date performance of 2.70 percent.
International Breweries is into brewing, packaging, and marketing of alcoholic and non-alcoholic beverages. Some of its beer brands include Budweiser, Hero Lager, Trophy lager, Beta malt, among others.