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Latest reviews of Post Merger International Breweries are in and it’s not looking good.



International Breweries financial statement, International Breweries revenue, International Breweries on Nigerian Stock Exchange, International Breweries shares, International Breweries Plc

Looks like the merger between International Breweries, Intafact Beverages Limited and Pabod Breweries Limited seem not to be going quite well.

In the latest 9 Months results released by the company, revenue rose 11.6% to N36.5 billion compared to the N32.7 billion reported in the full year ended March 2017. Profit after tax was up by more than 40% to N1.42 billion compared to its full year ended March 2017.

Unfortunately, the company’s earnings per share, which is they key indices to watch, fell by about 45% to 17 kobo. The reason for this fall has resulted in a suggested HOLD recommendation by Stanbic.

Stanbic pointed to margin contractions recorded by the company in its latest results and noted that the increase in operating cost may have been due to the restructuring following the merger.

Stanbic – Gross margin contracted to 38% from 46% for the 12-month period ended 31 March 2017, largely due to the sharp increase in the cost of raw materials, overheads, and depreciation. Similarly, EBIT margin contracted 16ppt to 9% with pocket of cost hikes. There were markedly sharp increases in salaries (33%), bad and doubtful debt (30x) and business running costs (129%) among others. This performance comes as a negative surprise because proforma statements had suggested similar operating profiles for the three breweries and EBIT margins for the pre-merger entity as at half year was 20%. It is likely that there are non-recurring costs from the merger or possible restructuring costs, which we will raise with management. 

They also noted that the company’s balance sheet was highly geared having increased to 189% from 86%. International Breweries saw its debt rise from N11.9 billion to about N88 billion between March 2017 and December 2018. This means a higher finance cost for the company further eating into profit margins.

Stanbic – A highly geared balance sheet is a concern: Debt to equity ratio notably increased sharply to 189% from 86%. Of particular concern is that most loans are short-term, including a N19bn overdraft with interest rates at 19% to 23%. We had expected a marked increase in debt given the investment in the $250m brewery but gross debt balance of N80bn is 2x our estimate. The $25m syndicated loan facility which was scheduled to mature February 2018 remained on the balance sheet. Consequent to the sharp increase in debt, net finance costs increased 24% driven by a fivefold increase in interest charges on bank loans even as FX losses declined 47%

Other potential negative headwinds cited were the anticipated increase in excise duties which will come into effect by July. Stanbic had no choice but to place this stock as a HOLD. They also valued the company at N64.


Ugo Obi-chukwu "Ugodre" is a chartered accountant with over 16 years experience in financial management, corporate finance and financial analysis. He is also a retail investor and a personal finance advocate with over a decade experience investing in the Nigerian stock market.Ugo is the founder/Publisher of Nairametrics and blogs regularly on the website.

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Covid-19: WHO approves China’s Sinopharm vaccine

WHO has announced the approval of China’s Sinopharm vaccine for Covid-19 vaccination.



Covid-19: First world nations oppose waiving intellectual rights for vaccine development

The World Health Organization (WHO) has announced the approval of China’s Sinopharm vaccine for Covid-19 vaccination.  The vaccine is reported to have 79% efficacy against covid.

This was disclosed today in a report by Reuters. The vaccine would also be the second Chinese-made vaccine after Sinovac vaccine and would be the first developed outside Europe and North America to receive WHO accreditation.

“This expands the list of COVID-19 vaccines that COVAX can buy, and gives countries confidence to expedite their own regulatory approval, and to import and administer a vaccine,” WHO Director-General, Tedros Adhanom Ghebreyesus said.

The WHO added that the easy storage requirements make it highly suitable for low-resource settings.

“Its easy storage requirements make it highly suitable for low-resource settings,” a WHO statement said while also disclosing that the vaccine has been approved for people above the age of 18 to receive two shots.

“On the basis of all available evidence, WHO recommends the vaccine for adults 18 years and older, in a two-dose schedule with a spacing of three to four weeks,” the statement added.

The vaccine was created by Beijing Biological Products Institute, a subsidiary of Sinopharm subsidiary China National Biotec Group, with an efficacy of 79% for all age groups.

The WHO however, admitted that few older adults (over 60 years) were enrolled in clinical trials, so efficacy could not be estimated in this age group.


In case you missed it

The quest for vaccine efficiency got a major boost earlier this week as Nairametrics reported that the United States government announced that it supports the waiver of Intellectual Property Protections on Covid-19 vaccine development, in a bid to boost the fight against the pandemic, and says it will participate in the Okonjo-Iweala-led WTO negotiation to make it happen.

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“Mama Taraba”, Former minister and senator, Aisha Al-Hassan is dead

Ex-Women Affairs minister, Aisha Jummai Al-Hassan, popularly known as Mama Taraba is dead



A former Minister for Women Affairs and ex-Governorship Candidate in Taraba State, Aisha Jummai Al-Hassan, popularly known as Mama Taraba is dead.

According to media reports she died in a hospital on Friday in Cairo, Egypt at the age of 61.

Al-Hassan, who was a former senator of the Federal Republic of Nigeria from Taraba North Senatorial District, was the All Progressive Congress (APC) Governorship Candidate for Taraba in the 2015 general elections.

READ: Abba Kyari’s last letter to President Buhari

She later contested for the same seat on the platform of the United Democratic Party in the 2019 general elections after resigning from APC and as a minister in the administration of President Muhammadu Buhari on July 27, 2018.

The former senator was born on the 16th of September, 1959 in Jalingo, Taraba State, to Alhaji Abubakar Ibrahim, Sarkin Ayukan Muri.

READ: Chad’s President Deby dies of injuries suffered on the frontlines, as son takes over

Aisha Jummai Al-Hassan attended Muhammed Nya Primary School, Jalingo and LEA Primary School, Tudun Wada, Kaduna before proceeding to Saint Faith College (now GGSS) Kawo Kaduna where she studied between January 1973 and June 1977.


Details later…

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