… FX losses, higher interest costs linked
…Stock price down by 7.3% year-to-date
Nigerian Breweries Plc has released its unaudited and provisional results for the third quarter (nine months) ended September 30, 2023 recording group loss before tax (LBT) of N78.163billion as against profit before tax (PBT) of N19.09billion in same period of 2022, representing a decline by 487.6percent.
In the same period, the foremost brewer reported group basic loss per share (LPS) of 689kobo as against earnings per share (EPS) of 182kobo in 9M’2022, represents 478.6 percent decline.
This result came despite that Nigerian Breweries grew its revenue by 2.1percent to N401.80billion from N393.44billion in same Q3 period of 2022.
Nigerian Breweries is a subsidiary of Heineken N.V. a company domiciled in the Netherlands, the latter having a 56.69percent interest in the equity of Nigerian Breweries Plc.
Year-to-date (YtD), investors have recorded negative return on the share of Nigerian Breweries (-7.3percent), underperforming the NGX ASI with positive return of +31.13 percent year-to-date (YtD).
Nigerian Breweries share price closed lower at N38 as at Wednesday October 25, down from N39 it was as at Tuesday. The share price had reached a 52-week high of N48.85 and 52-week low of N28.8.
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“Overall, volumes declined in the period under review due to continued high pressure on disposable income and the socio-political challenges in various parts of the country. However, flavoured beer volume increased led by Desperados,” said Uaboi G. Agbebaku, company secretary, Nigerian Breweries.
“Revenue increased by a low-single digit percentage driven by pricing to mitigate inflation. The operating profit was impacted by the lower volumes, higher input costs influenced by inflation and devaluation of the naira, and a one-off restructuring cost.
“Pricing and significant cost savings initiatives were not enough to fully mitigate rising input costs. A combination of foreign exchange losses due to the devaluation of the naira and higher interest costs resulted in a net loss during the period,” Agbebaku said.