Champion Breweries Plc ability to pay all debts owed helped the Nigerian beer maker revert to the path of profitability for the first time since at least 2011.
The just released Full year 2015 financial results of the company showed the Nigerian brewer posted a profit after tax of N77.14 million as against a loss after tax of N754.52 million in 2014.
The company’s profit position is attributable to the settlement of finance cost that represents interest charged on N11.6 Billion due to The Ray sun Nigeria Limited (parent company).
Champion Breweries’ sales increased by single digit 6.06 percent to N3.50 billion in 2015 as weak consumer discretionary spending caused a slow economic growth remains a drag on top lines.
Despite the effects of devaluations on raw material costs of breweries in Africa’s largest economy, Champion Breweries’ cost of sales fell by 6.01 percent to N2.50 billion. The drop in production costs culminated in an increase in gross profit by 56.21 percent to N999.69 million.
The company’s share price closed at N2.83 on the floor of the exchange while market capitalization was N22.15 billion. The share price has dropped a massive 65% in the last since its peak price of N8.11 last April. The rally was mostly spurred by rumors that the company could be acquired by Nigeria Breweries.
Champion Breweries still has a negative retained earnings of about N9.5 b (2014: -N9.6 billion) and is still a long way off from every paying dividends.