Nigerian Breweries’ loss widens to N149.5bn on FX crisis

Nigerian Breweries, one of the largest brewing companies in Nigeria, has recorded an after-tax loss which deepened to N149.5 billion driven by Naira devaluation as a result of FX exposure, BusinessDay analysis shows.

The company’s after tax loss stood at N149.5 billion in the nine months of 2024 from N57.2 billion in the similar period of 2024.

“The increase in net loss was again significantly influenced by FX loss due to the devaluation of the Naira and high borrowing costs arising from higher interest rates,” Nigerian Breweries said in its earnings release statement.

Nigerian Breweries net loss on foreign exchange transactions increased to N160.5 billion in the nine months of 2024 from N86.8 billion in the similar period of 2023.

The brewer, in a statement signed by Uaboi Agbebaku, company secretary, stated that, “The offer period for the company’s rights issue closed on October 18, 2024. The collation process is ongoing and would be followed by requisite approvals before the end of this year.

“The rights issue will allow the company to strengthen its balance sheet and significantly reduce FX exposure. This is part of the business recovery plan aimed at accelerating a reinstatement of the Company’s profitability. Our main shareholder, HEINEKEN, supported the rights issue by exercising its rights in full,” it stated.

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Revenue grew to N710.9 billion from N401.8 billion while cost of sales grew similarly to N500.9 billion from N249.2 billion during the comparable periods.

“Revenue grew by 75 percent driven by strategic pricing, innovation and market recovery. Gross profit grew by 36 percent although lower than revenue growth due to a 99 percent increase in cost of goods sold,” the firm said.

Following the rise in the cost of diesel and petrol, Nigerian Breweries Plc has signed a power purchase agreement with Konexa to adopt a 100 percent renewable energy transition for two of its Lagos and Ama Enugu breweries.

The firm said in a statement that the step was part of the transition of the company’s operations to renewable energy across the country, reflecting its commitment to the journey toward carbon neutrality across its footprints.

“Climate Fund Managers, a climate-focused blended finance investment manager and existing investor in Konexa will provide development funding for the project via its EU-supported Climate Investor One fund. Konexa and third-party co-financiers will also provide funding,” the firm noted.

Hans Essaadi, managing director of Nigerian Breweries Plc, while speaking during the official contract signing ceremony held at the company’s head office in Iganmu, Lagos, described the agreement signing as a significant milestone in the company’s 100 percent renewable energy transition.

“This partnership underscores our commitment to reducing carbon emissions, lowering operational costs, and achieving net zero before 2030,” Essaadi said.

“Nigerian Breweries recognises the critical role of renewable energy infrastructure in Nigeria, particularly amidst frequent outages. Our collaboration with Konexa demonstrates our dedication to accelerating the transition to renewable energy in our operations.

“We look forward to working with Konexa to achieve this transition, especially in the face of the increasing cost of fossil fuels,” he stated.

Pradeep Pursnani, the chief executive officer of Konexa, said the company was excited to be part of a project aimed at helping Nigerian Breweries move toward a more reliable and sustainable power source in its operations.

“With CFM’s support, we are advancing the development of key renewable energy infrastructure in Nigeria, helping companies like NB Plc’s transition to sustainable, reliable power and reduce their costs,” Pursnani said.

Pradeep Pursnani, Climate Fund Managers’ regional head of Africa, said the funding support for the project represented the company’s commitment to assisting Nigerian Breweries reduce its dependence on fossil fuels while strengthening the grid’s resilience.