[upme_private]Nigerian Breweries (NB:NL) released its 2013 H1 results with revenues rising 7.4% to N133billion as at June 30 2013 (H1 2012: N124.6b). Gross Profit during the year also rose 7.6% to N66.3billion during the period as the company struggled to deal with rising raw material cost. Core operating profit for the period will thus remain flat at N31.6billion growing by just 0.6% over the prior year. Pre-tax profits at the end if the period under review was N29.6billion and just 3.8% higher than the N28.5 billion posted same period last year.
- Revenue Growth managed to keep up with GDP growth rate at just 7.4%
- Margins struggled for growth as operating cost continued to eat up the little revenue growth they reported.
- Gross Profit margin for example was 49.6% this period no major difference from the 49.5% growth posted same period last year
- S,G & A grew double figures (15%) to N34.7billion signifying an inability to stem rising operating cost. This is the third straight reporting period that has seen rising operating expenses (18% YoY FY 2012, 9% YoY Q1 2013 and now 15% YoY H12013).
- Without the contribution of N1.4billion in other income, which rose 62% YoY, then pre-tax profits may have been lower in comparative terms to H1 2012.
- No significant reduction in Debts as the company maintained about the same debt to equity structure.
- Return on Equity of 12.7% is still very healthy and on course to at least match last years results. As it stands it is above inflation rate.
- NBL is still a very profitable entity and with a strong Revenue Reserve of N93.4billion. However, it still relies on loans and current liabilities to augment working capital requirements.
- It owes current back taxes of about 27.8billion and If required to be paid may be a financial strain on operations. Working capital is currently negative at a whopping N39.8billion
- Investment in Capex and capacity expansion has now topped N50billion in the last 18months
- NBL was trading at N177.4 at blog time and represents 33.8x TTM earnings per share.
- Anyone who buys at this price would currently be carrying an earnings yield of about 3%. Going by this result, things are not about to change anytime soon. Share price has increased 55% in the last one year and just 20% in value year to date (Jan – July)
Nigerian Breweries Released is 2013 H1 results in the website of the NSE[/upme_private]