Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home Industries Company News

Despite intensive advertising, International Breweries reported lower revenue and a loss

Emmanuel Abara Benson by Emmanuel Abara Benson
February 19, 2020
in Company News, Company Results
Despite intensive advertising, International Breweries reported lower revenue and a loss 
Share on FacebookShare on TwitterShare on Linkedin

By all means, International Breweries Plc was very aggressive with its marketing and advertising strategies in 2019. However, it appears that the effort did not quite reflect in the brewer’s bottom line. This is because not only did revenue drop, there was a loss after tax of N9.1 billion in Q4 2019.

International Breweries is the second-largest brewer in Nigeria in terms of market share, having overtaken Guinness Nigeria Plc last year. As you can expect, aggressive advertising has been majorly instrumental in this regard. But advertising can be expensive. In Q4 2019 alone, the company incurred more than N6 billion in advertising costs.

Belgium’s AB InBev to invest about N123 billion as International Breweries seeks funding ,International Breweries Q4 2019 result shows 5.8% revenue drop and a N9.1 billion loss

RelatedPosts

Wema Bank to begin N40 billion rights issue in August

Nigeria’s PZ Cussons fights off inflation to post 277% rise in profits

According to information obtained from the company’s unaudited Q4 2019 financial report, advertising expense was 64.9% more than N4.2 billion, which was recorded during the comparable period in 2018.

Money well spent?

The company’s adverts were dropping everywhere throughout last year. Across media platforms such as radio, TV, print, and on the internet, beer drinkers were bombarded with communication messages encouraging them to patronise the brand.

International Breweries also made copious use of celebrity endorsements to push its brands, including Budweiser, which it describes as the “king of beers”.

[READ MORE: International Breweries’ Q4 2019 result shows 5.8% revenue drop, N9.1 billion loss)

At the end of the year, the company did sell its products, but not as much as it expected to. Total revenue for the 3-month period ended December 31st stood a little bit above N35 billion, indicating a 5.8% decrease when compared to N37.3 billion that was recorded in Q4 2018.

Although the ads were everywhere, very colourful and fascinating as they were, they did not quite translate to more sales, let alone an increase in profit.

What could be responsible for the huge loss

International Breweries Plc has yet to offer an explanation as to what is responsible for the recorded under-performance. Results for the three quarters ended September 2019 showed a loss after tax of N16.4 billion, even as operating expenses grew significantly by 33.1% to N33.1 billion, driven mostly by a surge in marketing promotion expenses and administrative expenses. See here.

Perhaps the company will offer a full explanation when it releases its audited financial statement for full-year 2019.

In the meantime, it should be noted that the company reported net finance costs of N9.2 billion in Q4 2019. The administrative expense for the period stood at N8.2 billion as against N3.7 billion in Q4 2018.

The company’s stock closed Tuesday’s trading on the Nigerian Stock Exchange at a share price of N7.05.

Related

Tags: Guinness Nigeria Plcinternational breweriesInternational Breweries on Nigerian Stock ExchangeInternational Breweries Q4 2019 Result

Comments 2

  1. Paul Ovat says:
    February 19, 2020 at 1:29 pm

    Welldone on the analysis.

    Below is my personal opinion of the IB results.

    – Potential investors should give consideration to the just concluded right issue, which will significantly lower finance charges to around 5billion in 2020, thus net profit will become positive. This will make it one of the lowest in its industry
    – The company is still largely competing to gain market share, increase in marketing expense maybe driven by this.

    Reply
  2. Kasa says:
    February 19, 2020 at 4:01 pm

    Advertising is not everything afterall

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Hot forex
Cornerstone
Mega Millions
Polaris Bank
Access Bank
Bankers Committee
First bank


FCMB
Ikeja Electrics




    Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

    Recent News

    • Fitch upgrades Fidelity Bank’s issuer default rating from ‘B-’ to ‘B’
    • Fayose insists on a Southern president in 2023, unlikely to support Atiku
    • Top 5 reasons why you should consider France for your studies

    Follow us on social media:

    Recent News

    How Fidelity Bank is driving digital financial inclusion in Nigeria with impressive half year 2021 result

    Fitch upgrades Fidelity Bank’s issuer default rating from ‘B-’ to ‘B’

    June 29, 2022
    Ayo Fayose

    Fayose insists on a Southern president in 2023, unlikely to support Atiku

    June 29, 2022
    • ABOUT US
    • CONTACT US
    • PRODUCTS
    • ANDROID APP
    • iOS APP
    • DISCLAIMER
    • CAREERS
    • PRIVACY POLICY

    © 2022 Nairametrics

    No Result
    View All Result
    • Home
    • Exclusives
      • Financial Analysis
      • Corporate Stories
      • Interviews
      • Investigations
      • Metrics
    • Markets
      • Cryptos
      • Commodities
      • Equities
        • Dividends
        • Stock Market
      • Fixed Income
      • Market Views
      • Securities
    • Industries
      • Company News
      • Consumer Goods
      • Content Partners
      • Corporate deals
      • Corporate Press Releases
      • Energy
      • Entertainment
      • Financial Services
      • Hospitality & Travel
      • Manufacturing
      • Real Estate and Construction
      • Tech News
    • Economy
      • Get Data
      • Macro-Economic News
      • Research Analysis
    • Business News
    • Financial Literacy
      • Career tips
      • Personal Finance
    • Lifestyle
      • Billionaire Watch
      • Profiles
    • Opinions
      • Blurb
      • Op-Eds

    © 2022 Nairametrics

    Social Media Auto Publish Powered By : XYZScripts.com