The board of Nigerian Breweries Plc, on Thursday, lamented the country’s harsh operating environment that continues to impact bottom-line negatively but assured that strategies are in place to ensure shareholders to deliver good returns on investment.
A statement by Uaboi Agbebaku, the company secretary and legal director, while giving the assurance, said: “the 2019 operating environment has so far shown similarities with the difficult environment witnessed in 2018.”
The statement listed factors hindering the robust financials expected this year to include “the impact of inflation and currency devaluation was minimized by the continued focus on cost efficiencies delivered through Cost Leadership initiatives.”
Sales revenue for the period stood at N91.387bn, up by 3.33% from N88.445bn in 2018; while excise duty expense jumped by N2.631bn or 48.02% from N5.479bn in the prior Q1 to N8.11bn. This resulted in net revenue of N83.277gbn, up from N82.966bn.
Cost of sales rose 7.8% from N44.948bn to N48.233bn; leaving gross profit at N35.064bn, down from N38.018bn.
Other income dropped by 27.98% from N218.13m to N157.1m; marketing and distribution expenses inched 7.91% up from N15.341bn to N16.554bn; administrative expenses dropped 12.07% to N4.599bn from N5.231bn. Operating profit, therefore, dropped by 20.42% to N14.057bn, as against the N17.663bn reported in the first quarter ended March 31, 2018.
Finance income dropped by 75.07% to N9.43m from N37.83m; finance costs rose marginally also from N2.452bn to N2.608bn; net finance costs inched to N2.599bn from N2.414bn.
Profit before tax dropped by 24.86% to N11.457bn from N15.249bn; income tax expenses dropped to N3.432bn from N5.045bn; leaving profit after tax falling by 21.34% from N10.203bn to N8.025bn. Earnings per share, therefore, fell to 100 kobo from 128 kobo.
In the statement, Agbebaku said “the increase in net revenue was offset by higher excise duty following the excise duty regime introduced in 2018.
“Cost of Sales increased by 7.3% primarily driven by Raw Materials and Consumables while Marketing and Distribution expenses increased 7.9% over the same period in 2018. Administrative Expenses reduced by 12%, partially driven by the right-sizing exercise undertaken by the Company in Q3, 2018.”