Directors of Nigerian Breweries Plc, realised its unauditied financials for the first two quarters of 2023 which revealws that although management succeeded in taming cost of production relatively, it could not control net loss on foreign echange transaction, which in the second quarter (April to June) took a giant leap from N5.403bn to N70.619bn, leaving total for both quarters at N85.26bn from just N7.28bn. Finance costs for the period lso stood t N6.428bn in just the second quarter, from N1.932bn; which raised total for half year to N11.148bn, from N3.09bn.
Half-year revenue rose to N277.419bn, a marginal increase over the previous N274.084bn; with cost of sales growing faster, from N155.349bn to N165.094bn; resulting in gross profit of N112.324bn, down from N118.735bn.
Other income dropped from N1.999bn to N1.353bn; while selling and distribution expenses dropped marginally from N69.803bn to N68.459bn; administrative expense increased from N14.48bn to N16.266bn; following which results from operating activities declined from N35.839bn to N28.378bn.
Finance income was muted at N185.566m from N228.744m; resulting in net finance costs of N96.222bn, compared to N10.142bn in the corresponding period of last year.
Loss before tax stood at N67.844bn, with the second quarter alone responsible for N50.407bn of the loss; compred to the previous N25.697bn half year profit. The company’s N20.245bn tax rebate reduced its net loss for the period to N47.599bn, compred to the previous N18.742bn half year net profit.
A statement signed by the Company Secretary/Legal Director, Uaboi Agbebaku, revealed that the half-year results were majorly impacted by the devaluation of the naira which led to revaluation of foreign exchange obligations and higher input costs.
Other factors, he said, were the effect of petroleum subsidy removal on consumers, a one-off redundancy exercise cost and the impact of the cash crunch that hit the country in the first quarter of the year.
Agbebaku explained that despite the impact of these challenges, the company recorded more than 100% increase in its Quarter 2 operating profit versus the corresponding period in 2022, driven mainly by pricing, focus on premium products, as well as strong and effective management of cost by the company. The Quarter 2, 2023 operating profit, he stressed,s was also an improvement on the Quarter 1, 2023 operating profit.
He added that despite the current impact of the policy reforms of the Federal Government, the company was optimistic that the reforms would be beneficial in the long term for the company and the country as a whole.
The board reiterated its commitment to creating long term sustainable value for the company’ shareholders.