Kayode Tokede
Nigerian Breweries Plc (NB), yas announced that it will seek shareholders’ approval to raise N600 billion capital by way of rights Issue.
The Company Secretary, Uaboi Agbebaku in a signed statement on the Nigerian Exchange Limited (NGX) stated that the board resolved to recommend to shareholders at the next Annual General Meeting (AGM), the raising of up to N600 billion capital by way of Rights Issue, subject to regulatory approvals.
According to him, the multinational company wanted to raise fresh capital on the backdrop of naira devaluation by the Central Bank of Nigeria (CBN) and the high cost of funds on the Company’s capital structure, especially on the Company’s debts.
Nigeria Breweries in its 2023 result and accounts marked its worst performance in over 10 years, attributable to the unification of the naira and hike in costs of production influenced by double-digit inflation rate.
Nigerian Breweries recorded a loss before tax of N145.22 billion in 2023 from N17.34billion profit before tax in 2022, and it declared N106.31billion loss in 2023 from N13.19billion profit after tax reported in 2022.
He disclosed that the proceeds from the Rights Issue will help to reduce the huge debt burden arising thereby leading to a healthier balance sheet.
“Coupled with ongoing cost savings and other operational efficiency efforts, the Board is optimistic about steering the Company back to the path of sustainable profitability in the near future.
“The Board also resolved to recommend to shareholders at the AGM scheduled for the 26th of April 2024, the increase in the Company’s share capital to take care of the new shares to be allotted under the Rights Issue,” he said.
The multinational brewery marker reported slow revenue growth amid weak purchasing power as other financial parameters such as cost of sales, operating expenses, and foreign exchange losses impacted the Group’s overall performance in the year under review.
The company hits the highest revenue in 2023 financial year, driven by strong pricing in some of its products.
Nigerian Breweries reported N599.64billion revenue in 2023, representing an increase of nine per cent from N550.64billion in 2022. In the prior year, the group reported 26 per cent increase in revenue from N437.29billion in 2021.
The Group reported net loss on foreign exchange transactions moved to N153.33billion in 2023 from N26.34billion in 2022 as against N7.04billion in 2021, and it is on the back of higher foreign exchange losses as exposure from its foreign currency-denominated payables.
