Financial analysts have been talking up a return to profitability for Nigerian Breweries Plc and other multinationals that were hit by a gale of foreign exchange headwind in the 2023 financial year.
This is coming as the company has announced strategic business recovery plans designed to return it to profitability following a loss of N106 billion in the 2023 business year, mostly as a result of the foreign exchange headwinds that occasioned a steep fall in the value of the Naira.
The recovery plans, among which are the raising of N600 billion through Rghts Issue, the inclusion of a whiskey portfolio in the basket of offerings, and the temporary closure of two of its nine breweries, are envisioned to return the business to the green columns.
Nigerian Breweries, like many other companies in the Nigerian fast-moving consumer goods value chain, was forced by the steep plummet in the value of the naira to post losses, with the brewer announcing a loss of N106 billion, a result that sent tongues wagging as to the possibility of a positive performance in the 2024 financial year.
Analysts have however been sharing their views on the future of the conglomerate in 2024, asserting that with a more stable foreign exchange market, the brewer, like most other big corporations will return to profitability in 2024,
Speaking to journalists on the impact of the naira exchange on corporate performance, the Managing Director and Chief Executive Officer of Lyceum Alliance Limited, a financial advisory and management consulting firm), Dr. Jekwu Ozoemena expects a positive economic outlook as the country’s currency continues to stabilize against the dollar and other major international currencies.
Jekwu, who was at one time the Managing Director of Access Bank Zambia, blamed the poor performance of Nigerian Breweries on the steep drop of the naira in the foreign exchange market, blaming it for more than 90 percent of the loss the company posted.
“If you look at the 2023 annual result of Nigerian Breweries, for instance, the company performed well on most critical performance indicators but was shaken off the profits path by the external factor of naira depreciation. For example, this company recorded a significant growth of more than N1 billion in assets, from N621 billion in 2022 to N797 billion in 2023. It also made significant savings in the marketing side of the business, spending N51 billion in 2023 as against N57 billion in 2022. This means that the company, given all other factors, would have made more profits in 2023 than in 2022, but these were undone by the rapid decline in the value of the naira between August and December 2023,” he stated.
