Nigerian Breweries grows Q1 profit by 38% on increased beer sales

After a difficult year, Nigeria’s largest beer maker, Nigerian Breweries (NB) grew profit by 38 percent helped by increased beer sales in the first quarter of 2021.

The Brewer’s profit after tax rose to N7.6 billion in the first quarter of 2021 compared to N5.5 billion in the same period last year.

NB grew beer sales to N105.8 billion, up by 27 percent from N83.2 billion in the first quarter of 2020.

Despite the improvement in sales, the beer maker was pressured by a 36 percent jump in cost of sales to N66 billion from N48.3 billion the previous year on the back of persistent input costs.

However, gross profit surged 13.7 percent to N39.6 billion in Q1 compared to N34.8 billion a year ago.

Marketing and distribution expenses dropped by 5.9 percent to N25.4 billion in Q1’21 from N24 billion in Q1’20.

Administrative expense also grew to N5.7 billion, a 7.5 percent jump from N5.3 billion recorded in the first quarter of 2020.

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Administrative expenses are expenses an organization incurs that are not directly tied to a specific function such as manufacturing, production or sales.

Other income also rose 105 percent to N368 million compared to N181 million in the same time last year.

The beer maker’s Earnings per share also increased by 39 percent to N96 per share in Q1’21 compared to N69 per share in Q1’2020.

Profit before tax jumped to N11.5 billion in the first quarter, a 38.8 percent increase compared to N 8.2 billion last year.

Income tax rose 39 percent to N3.8 billion in the first quarter of the year compared to N2.7 billion in the previous period.

The beer maker paid N7.38 billion as Value Added Tax (VAT) in Q1, 49 percent higher than N4.93 billion made the same time last year.

Finance income surged 212.5 percent to N25 million in the period under review from N8 million a year ago. While Finance cost rose 13.4 percent to N3 billion compared to N2.6 billion in Q1’20.

This brought net finance cost to N2.9 billion in the first quarter from N2.6 billion in the first quarter of 2020.

The company says the focus of the Board and Management remained the mitigation of the impact of the pandemic on the business.