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Nigerian Breweries Suffers 25.4% 2016 Net Profit Slip, Offers N36.47bn Dividend

As expected, Nigerian Breweries, on Monday presented its audited result for the year ended December 31, 2016, showing that although sales revenue rose by a marginal 6.67% from previous year’s level, profit fell by 25.4%, despite which the directors have recommended a dividend of N36.39bn.
Specifically, sales revenue for the period stood at N313.743bn, as against the previous N293.905bn, with cost of sales rise to N178.218bn, up by N28.482bn or 19.02% from N149.736bn. Marketing and distribution expenses rose slightly to N61.312bn from N58.454bn; while administrative expenses was slightly suppressed to N21.924bn from the previous N23.969bn.
This left operating profit of N52.903bn, a drop from N62.229bn or 14.98%. Finance cost rose to N13.645bn from N8.217bn; as profit before tax fell by N14.84bn or 27.22% from N54.514bn to N39.674bn, while after tax profit came to N28.416bn, which translates to N3.58 Earnings Per Share (EPS), from N38.056bn, or N4.82. The net profit decline was mitigated on the strength of the reduced tax expenses from N16.458bn to N11.257bn.
If approved as expected, given the shareholding structure of the company (with Heineken N.V. group controlling 52.68% and Stanbic Nominees Nigeria Limited- 12.94%), the company would pay a total of N28.386bn or N3.58 per share as final dividend. Already, N7.929bn has been paid out in form of the N1.00 interim dividend per share distributed in October last year. This means shareholders, subject to approval at the AGM, are required to approve N2.58 per share, representing a dividend yield of 2.15% on the final dividend and 2.99% on total dividend based on current market price. In 2015, NB paid shareholders N3.60 per share as dividend.
A statement by Uaboi Agbebaku, the company secretary, said the directors are furthermore, “recommending to shareholders for their approval at the annual general meeting, an option for qualifying shareholders to receive new ordinary shares in the company instead of the final dividend, on terms and conditions as the directors may determine, based on prevailing market conditions.”
Consequently, the directors are recommending an increase in NB’s authorized capital to N5bn, by the creation of addition two billion units.

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