Consolidated Breweries links FY ’12 profit decline to acquired businesses

Consolidated Breweries plc has attributed the decline in its profit after tax (PAT) for the full year 2012 to losses from merged and acquired businesses, “which have been consistently improving their financial results since their respective acquisitions, and interest cost.. For the short term, interest cost will continue to impact PAT.”

The financial results presented to shareholders of Consolidated Breweries plc at its 33rd Annual General Meeting (AGM) showed that the Group’s PAT declined by 79 percent from N2.2 billion in 2011 to N444.8 million in 2012; though the group’s revenue was N37.4 billion in 2012, which represented a 26 percent increase from 2011 revenue of N29.7 billion.

The company’s investments increased from N4.7 billion in 2011 to N9.5 billion, mainly due to capacity extensions. Its diluted Earnings Per Share (EPS) declined by 31 percent to 585 kobo in 2012 (against 2011 level of 845 kobo). The group’s EPS declined by 61 percent to 229 kobo in 2012 (against 2011 level of 590 kobo).

The company declared final dividend payment of 80 kobo per share, resulting in a total dividend payment of 110 kobo per 50 kobo per share for 2012, in line the Company’s 50 percent dividend payout ratio. The proposed dividend amounting to N396,857,293.80 is payable subject to withholding tax at the appropriate rate, and will make the total gross dividend for the fiscal year 2012 after including the payment of an interim dividend of 30 kobo per 50 kobo ordinary share, amount to N545,568,231.38 (that is 110 kobo per 50 kobo share).

Oyin Odutola-Olurin, chairman of the Board of Directors of Consolidated Breweries Plc said: “2012 has been another strong year of progress for Consolidated Breweries. We continued to invest in equipment in our breweries as well as contract production in Sango Otta, in order to increase production.

This increase in volume and production of our“33” Export Lager Beer brand and malt drinks in cans has made us remain tall in the market amidst our competitors. The results have been positive in this regard, though the contract brewing led to an increase in variable expenses.”

Odutola-Olurin added, “We continued the implementation of our expansion initiatives by increasing our stake in DIL/Maltex (Nigeria) Plc to about 98percent, and Benue Brewery Limited to 100 percent in 2012. We also acquired about 57 percent equity stake in Champion Breweries Plc, and subsequently merged with DIL/Maltex and Benue Brewery via a Scheme of Merger, with effect from 31 December 2012.

The Merger is part of our broader restructuring programme to increase value generation through the streamlining of management, staff, operations and processes across our business units and subsidiaries, thereby leveraging positive economies of scale in purchasing and manufacturing, and unifying distribution and sales strategies. 

IHEANYI NWACHUKWU