Nigerians have increased their alcohol consumption after the lockdown period and this has helped the country’s biggest beer makers boost sales and cut losses in the third quarter of 2020 compared to the previous quarter.
Although Nigeria’s biggest beer makers made a combined loss of N1 billion in the third quarter, their loss position is down from as high as N15.5 billion in the second quarter.
The beer makers surveyed by BusinessDay include Nigerian breweries, International Breweries, and Guinness Nigeria.
The reopening of bars, restaurants, clubs, hotels, and other social spots across the country after the lockdown period has increased the beer makers’ sales volume in Q3’20 compared to Q2’20.
The brewers combined grew alcohol sales by N44.2 percent to N147.4 billion in Q3 from N102.2 billion in the previous quarter.
Cost of sales jumped N43.6 percent to N103.6 billion in Q3 against N72.1 billion in Q2 signalling that the improved performance was not stirred by cost-cutting measures but improved alcohol sales.
Gross profit surged 45 percent to N43.7 billion compared to N30.1 billion in the previous quarter.
The brewers also reduced borrowing costs by 14 percent to N7.1 billion against N8.3 billion while finance income surged 69 percent to N570 million in Q3.
While Nigerian Breweries was the only one to make a profit of the beer makers surveyed, International Breweries and Guinness saw reductions in the losses booked in the quarter under review.
Nigerian Breweries
Nigeria’s biggest brewery by market capitalization saw profit skyrocket to N1.35 billion in Q3 compared to N83.9 million in Q2 2020.
Revenue also jumped 19.8 percent to N82.2 billion in Q3’20 from N68.6 billion in Q2’20. The cost of sales was up 16 percent to N51.4 billion in Q3’20 from N44.3 billion in the previous quarter.
Profit before tax jumped 3673 percent to N2.63 percent in Q3’20 from 70 million in Q2’20. Finance cost rose 17 percent to N4.9 billion in the third quarter of 2020 compared to N4.1 billion in the previous quarter.
Nigerian Breweries’ stock remained flat at N52 per share, Tuesday.
International Breweries
Nigeria’s second-biggest brewer made a loss of N1.5 billion in Q3’20, a 59.4 percent reduction from the loss of N3.7 billion made in Q2’20.
The brewer grew sales by 28.2 percent to N25.1 billion compared to N25.2 billion in Q2’20. The cost of sales was up 33 percent to N29.1 billion in Q3’20 from N21.9 billion in the previous quarter.
The beer maker slashed borrowing costs by 44 percent to N894.8 million in Q3’20 from N1.29 billion in the second quarter. International Breweries closed 1.43 percent lower, Tuesday.
Guinness Nigeria
Guinness Nigeria made a loss of N841 million in Q3’20, narrowing the N11.9 billion loss made in the second quarter of 2020 by 1314 percent. Guinness Nigeria also grew sales by 257 percent to N30 billion in Q3’20 from N8.4 billion in the second quarter of 2020.
Cost of sales was up 296 percent to N23 billion in the third quarter of 2020 from N5.8 billion in the previous quarter.
The beer maker was able to cut borrowing costs by 53.5 percent to N1.3 billion in Q3’20 from N2.8 billion in the second quarter of 2020. Profit before tax also narrowed to N317 million Q3’20 from N15 billion in Q2’20. Guinness Nigeria’s stock is down 2.65 percent to N16.55 as the market closed on Tuesday.
