Just like United Capital Plc before it, the management of Nigerian Breweries Plc, the most capitalized company on the Nigerian Stock Exchange (NSE) behind Dangote Cement, presented its un-audited result for the three months ended March 31, 2017 indicating a need to significantly increase sales, while creatively keeping operating costs in check during the remaining rest of this year, to ensure a worthwhile dividend for shareholders at year end.
According to the result made available to the NSE, turnover for the period under review rose by N13.733bn or 17.7% to N91.288bn from previous year’s N77.554bn. A segmenting of the revenue structure was not provided, but cost of sales was up N10.45bn, representing a faster 25.95% rise from N40.273bn in the first quarter of 2016, to N50.724bn; leaving gross profit at N40.564bn, as against the previous N37.281bn, a N3.282bn or 8.8% rise, owing to the increase in sales cost.
A further breakdown of the company’s N72.29bn total cost of sales, marketing & distribution and administration for the period, up from N59.704bn, showed that raw materials and consumables rose from N24.563bn to N30.186bn, a difference of N5.623bn or 22.89%; followed by N10.282bn depreciation, compared with the previous N6.632bn; while employee benefits rose from N9.066bn to N10.863bn. Distribution cost stood at N7.283bn from N5.825bn; just as royalty and technical service fees increased from N2.68bn to N2.872bn.
Other income stood at N203.251m, up from N143.57m; while marketing and distribution expenses rose by N2.598bn or 18.65% from N13.93bn between January and March 2016, to N16.529bn; just as administrative expenses dropped slightly to N5.036bn from N5.5bn; bringing operating profit to N19.201bn from N17.993bn.
Finance income dropped to N46.959m from N59.378m; finance costs fell by N1.236bn or 40.59% from N3.045bn to N1.809bn; resulting in net finance costs of N1.762bn, as against the previous N2.986bn.
Profit before tax for the period therefore rose by N2.431bn or 16.2% to N17.439bn, as against the previous first quarter’s N15.007bn. A N1.436bn or 31.55% provision by the management for income tax expenses based on effective rate of 30.2%, left income tax expenses at N5.989bn, from N4.553bn in the corresponding first quarter of last year; following which profit after tax crawled to N11.449bn, representing an increase of about N994.742m or 9.51% from N10.454bn in 2016, resulting in Earnings Per Share of 144 kobo, as against the previous 132 kobo each.