Buoyed by what it termed the resilient consumer demand that drives volume growth ahead of industry in the first quarter ended March 31, 2022, the management of International Breweries Plc, on Monday assured investors and traders through the Nigerian Exchange Limited portal that it is poised to building on the momentum of its strong 2021 full-year performance and significantly drive revenue and profit growth in the months leading to this financial year-end.
A statement by the company, part of Anheuser-Busch InBev, (ABInBev), the world’s largest brewer with over 400 beer brands, noted that the return to profit in 2022Q1, was helped also by its above industry average growth in volume of nearly 50%, which resulted from a consistent growth across all its brand portfolio.
Specifically, it said “keeping focus on profitability, we have enabled our High-End Company brands to grow healthy in the market. Our global brand, Budweiser and our newest innovation, Trophy Extra Special Stout are on a growth path as part of the high-end growth of above 40%.
“In terms of profitability, our Gross Profits grew by 307% while Gross Margins expanded by +1800bps,” expressing satisfaction that in absolute terms the company returned to profitability in in the period under review, resulting in a positive operating profit of N7.8bn (excluding net foreign exchange losses) and Profit Before Taxes of N1.9bn amidst cost headwinds.”
Investdata News earlier reported a 47.63% growth in sales revenue for the period from N38.964bn to N57.521bn in the corresponding period of last year, with Cost of sales rising to N37.567bn from N32.478bn, the lion’s share of which was materials consumed and allocated overheads of N29.813bn from N22.931bn respectively. This resulted in a gross profit of N19.954bn, compared to N6.485bn in the prior first quarter.
Administrative, marketing, and promotion expenses for the period grew to N12.106bn from N8.977bn; impairment charge on financial assets dropped from N217.761m to N34.18m; while other expenses soared to N4.114bn from N167.671m, of which unrealized net foreign exchange loss rose to N3.489bn, compared to the again of N81.137m; following which operating profit stood at N3.699bn from a loss of N2.877bn.
Finance income grew to N1.507bn from N17m; just as finance cost soared to N3.349bn from N684.385m; resulting in a net finance cost of N1.842bn, against the N684.468m reported in 2021.
Profit before tax stood at N1.856bn, from the previous loss of N3.561bn; while income tax of N1.135bn; compared to a credit of N982.948m; bringing net profit to N721.167m from a loss of N2.578bn; translating to earnings per share of three kobo, against the 10 kobo loss.
Arising from this robust growth, the company’s share price recorded the second biggest price jump last week, gaining N1.65 per share, or 32.35%, from the N5.10 per share it opened the week, to N6.75 each, just a few points shy of the 32.54% gain by rival Champion Breweries, and ahead of the 32.20% notch by Cadbury Nigeria Plc. The company’s shares consolidated last week’s gain with a further 9.6% growth, which earned it a place among the top five biggest gainers at the end of Monday’s trading session.
Inspired by this fit, the management of International Breweries, says it plans to further strengthen its “brands through powerful campaigns and commercial actions to grow in market.”
Commenting on the Q1 performance, the statement quoted Hugo Dias Rocha, Managing Director, as noting that “based on a consistent commercial strategy, we are growing ahead of our industry.
“We have continued our journey to profitability, which translates in strong results. We remain committed to create value to our stakeholders consistently,” it added.