Nigeria’s largest beer-maker Nigerian Breweries has released its result full year 2019 for the period ended 31 December 2019.
Here are the key takeaways from the result
Amidst a strong double-digit inflation environment, the beer maker reduce cost of sales and administrative expenses by 2.9percent Year-on-Year and 6.9percent Year-on-Year respectively to N191.8 billion and N19.4 billion apiece.
The moderation in administrative expense reflected declines in employee benefits such as salaries & wages and transportation allocations.
The company recorded N2.7 billion in origination and reversal of temporary differences that reduced effective tax rate to 31.0percent in full year 2019 as compared to 33.9percent in 2018.
Net operating cash flow improved by N8.4 billion Year-on-Year to N38.7 billion in full year 2019.
Management maintained capital expenditure intensity at full year 2018 levels of 9.3percent in full year 2019, highlighting its intention to maintain market dominance.
NB is in the market to raise N45.0 billion as part of its N100.0 billion Commercial Paper (CP) programme. This move is likely to result in a reduction in effective interest rate in the current financial year given current yield levels.
The result however has some downside risks. These include Aggressive competition and sin taxes continued to mute growth in revenue in full year 2019 (-0.4% Year-on-Year at N323.0 billion). Marketing and distribution expenses up 10.9percent Year-on-Year was pressured by advertising, sales promotion, and transportation. Although this marketing effort supported Q4’19 revenue, its impact was largely muted over the full year period.
