Nigerian Breweries Records 11% Profit Decline

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Nigerian Breweries Plc has recorded a profit after tax (PAT) of N19.06 billion for the half year ended June 30, 2016. The performance showed a decline of 11 per cent compared to N21.477 billion recorded in the corresponding period of 2015.

The unaudited numbers showed the company ended the H1 with revenue of N157.37 billion, an increase of four per cent over the N151.67 billion declared in the corresponding period in 2015.

Gross profit stood at N73.983 billion, as against N74.224 billion. Administrative expenses reduced from N11.533 billion to N10.849 billion. However, net finance cost jumped from N2.917 billion to N8.392 billion. As a result, profit before tax fell from N30.989 billion to N25.546 billion in 2016, while PAT declined from N21.477 billion to N19.066 billion in 2016.

The Board of Directors of Nigerian Breweries, in a statement signed by the Company Secretary/Legal Adviser, Mr. Uaboi Agbebaku, explained the company was able to deliver top line growth with revenue increasing by four per cent compared to the first six months of 2015.

However, it added that rising inflation combined with higher inputs costs as a result of scarcity of foreign exchange, led to a flat operating profit compared with the preceding year.

“Despite a lower interest cost from the Commercial Paper Programme, PAT declined by 11 per cent, mainly due to foreign exchange losses arising from the rates going up in June. Athough the board expects the operating environment in 2016 to remain challenging for the rest of the year, the company remains focused on its twin agenda of cost leadership and market leadership supported by innovation and the board remains positive on the Nigerian market for the medium and long term,” the company said.

Meanwhile, the stock market remained bearish shedding with the Nigerian Stock Exchange (NSE) All-Share Index closing lower by 0.1 per cent to be at 28,703.09. Market capitalisation lost N9.4 billion to close at N9.8 trillion.

Performance remained depressed by continued sell pressure in banking stocks such as Skye Bank Plc, which went down by 9.0 per cent. The stock has tumbled by 41.9 per cent since the Central Bank of Nigerian (CBN) replaced its board and management on July 4, 2016.