Nigerian Breweries reports 43.5% decline in profit

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By Kayode Tokede

Nigerian Breweries plc has reported 43.5 per cent decline in profit after tax to N6.94billion in its nine months unaudited results for period ended September 30, 2020 as against N12.3billion reported in prior nine months results.

The breweries manufacturing company in its results to the Nigerian Stock Exchange (NSE) on Thursday reported 36.3 per cent decline in profit before tax to N10.98billion in nine months of 2020 compared with N17.22billin reported in nine months of 2019.

With decline in profits, Nigerian Breweries’s basic Earnings per share (kobo) dropped to N0.89 in nine months of 2020 from N1.53 reported in nine months of 2019.

Decline in profits can be attributable to increase in finance cost and slow growth in revenue.

Nigerian NewsDirect gathered that the company reported 43.4per cent increase in finance cost to N11.73 billion in nine months of 2020 as against N8.18 billion reported in nine months of 2019, while revenue closed the months under review at N234.04 billion, 0.7per cent below N235.68 billion reported in prior nine months of 2019.

According to the company, “Interest expenses for the nine-month period ended September 30, 2020 amounted to N8.8 billion (nine months ended September 30, 2019: N8.2 billion).

“Other net finance expenses for the nine-month period ended September 30, 2020 amounted to N3 billion (nine-months ended September 30, 2019: N2.5 billion).

“The interest expenses on the net pension liability for the period ended September 30, 2020 amounted to N1.4 billion (nine-month period ended September, 30 2019: N1.8 billion).”

From balance sheet position, the group reported N467.23billion as at September 2020, 22 per cent increase over N382.8billion reported in full year ended December 31, 2019.

Shareholders of Nigerian Breweries Plc had approved a total dividend of N16.1 billion for the year ended December 31, 2020.

Chairman of the Company, Chief Kola Jamodu, explained that Nigerian Breweries had earlier paid an interim dividend of N3.99 billion, which is 50 kobo per share, in December 2019, and that the final dividend will therefore be N12.1 billion, which comes to N1.51 per share and that would become payable on June 24, 2020.

Meanwhile, company recorded a net revenue of N323 billion as against N324.4 billion recorded in 2018. Jamodu attributed the company’s performance in 2019 to inflation at double-digit rate, increase in input cost and further rise in the Excise Duty rate which could not be passed to the consumer due to continued pressure on purchasing power.

According to him, the business was nevertheless able to post a positive Profit After Tax of N16 billion for the year due to series of innovations and implementation of cost efficiencies.

Assuring investors of a brighter future, Jamodu said that the Company remained focused on delivering long term sustainable value to its shareholders in line with its philosophy of ‘Winning with Nigeria’.

The company had announced to The Nigerian Stock Exchange and the investing public of the continuation of its Commercial Paper (CP) programme with the launch of Series 9 and 10 of the programme which opens on October 23rd, 2020.

The Company Secretary, Uaboi. Agbebaku in a signed statement said, “While Series 9 would be for a tenor of 180 days, Series 10 would be for 270 days. The CP Programme aims to raise up to N20 billion to support the Company’s short-term funding needs.

“The CP Programme continues to provide the opportunity for non-equity investors to invest in the Company, support the Company’s cost management initiatives and serve as an additional source of funding for the Company.”