Nigeria Breweries H1 loss widens to N85.2bn as finance expense spikes

Nigerian Breweries Plc recently announced its unaudited and provisional results for the half year (six months) ended June 30, 2024.

The group reported Loss After Tax (LAT) of N85.199billion as against LAT of N47.599billion in H1 of 2023, representing an increase by 79 percent.

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Though, the brewer’s group revenue grew by 72.9 percent to N479.767billion from N277.419billion in H1’2023, its net finance expense spiked by 60.5percent to N154.480billion from N96.223billion.

The Company said it continues to navigate the challenging operating environment characterised by soaring inflation, exchange rate volatility, security challenges, elevated input costs, and rising cost of living.

Further look at the H1’24 financial result shows Nigerian Breweries Loss Before Tax (LBT) printed higher by 71.5 percent to N116.341billion from N67.844billion in H1’23.

“Despite these headwinds, the Company has demonstrated resilience and is on the path to recovery in its operations. Revenue grew by 73percent in the half year compared to the same period in 2023.

“The growth was driven by strategic pricing, innovation, volume and market recovery. Gross Profit grew by 42percent, although lower than the rate of growth in revenue, due to a 93percent increase in the cost of goods sold driven by currency devaluation and inflation,” Nigerian Breweries said in its earnings release.

Speaking on the result, Hans Essaadi, Managing Director/CEO, Nigerian Breweries Plc said, “In the 6 months ended 30 June 2024, Nigerian Breweries demonstrated resilience and is on the path to recovery as seen in the results delivered despite the challenging external environment characterized by high inflation and heightening operating costs.”

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“Our revenue grew by 73percent in the half-year compared to the same period in 2023. The growth was driven by strategic pricing, innovation volume growth, and market recovery. Cost of sales, distribution, and admin expenses increased by 46percent, largely due to inflationary pressure and forex devaluation impacting imported materials. We also continue to invest behind our brands and categories and support the recovery of the market.”

Essaadi also disclosed that the company is in the process of initiating a Rights Issue to raise up to N600 billion in additional capital to restore the business to profitability and enhance operational and financial stability as part of its resilient and forward-thinking strategy.

“The funds raised will be used to eliminate our foreign exchange-denominated debts and reduce our local debts, thereby mitigating our exposure to the continuing economic challenges. Through our cost-saving and other efficiencies initiatives, we recorded a 34percent increase in operating profit, signalling the resilience and strength of our operations”, Essaadi explained.

“We are conscious of the continued challenging operating environment with double-digit inflation and pressured consumer income spending. However, we continue to focus on our strategy to deliver value to our shareholders while contributing to the country’s economic development”, he added.

Speaking on behalf of the Board, Legal Director and Company Secretary, Uaboi Agbebaku, assured that “the Board remains confident in our long-term strategy to deliver value to our Shareholders and re-affirms the Company’s enduring commitment to Winning with Nigeria through people development, strategic innovation, operational efficiency, and community impact”.