The CEO of Nigerian Breweries, Hans Essaadi has lamented that Nigerian consumers of its Goldberg brand can no longer afford its product- Goldberg lamenting the effect of skyrocketing inflation on the company’s financial performance resulting in a loss of N106 billion in 2023
He said this while speaking to investors on the company’s financial resulted where he stated that despite the ugly macroeconomic conditions the company recorded a 9% increase in revenue to N599.6 billion.
According to him, the cash scarcity occasioned by the naira redesign fiasco coupled with the fuel subsidy removal, devaluation of the naira and double-digit inflation resulted in the company recording a net loss of N106 billion in 2023 from the N13.18 billion profit for 2022.
- He stated, “It has been unprecedented year for our business in Nigeria. We saw a significant decline in the mainstream lager market as a result of Nigerian consumers no longer able to afford a Goldberg after a hard day’s work,”
Preparation for 2024
Going into the new year, the company stated that it is prepared to face the adverse macroeconomic conditions and with the knowledge from 2023, it will be able to create value for its consumers and other stakeholders.
- He stated, “Going into the new year, we are conscious of the continued severe macro-economic challenges – rising inflation, heightening operating costs and pressured consumer income spend. However, we believe the challenges of 2023 have laid the groundwork for opportunities that would lead to value creation for all our stakeholders”
Other key highlights of the company’s 2023 result are;
- Revenue increased 9%.
- Cost of sales increased 15%.
- Marketing, Distribution & Admin expenses increased 5%.
- Operating profit declined 15%.
- Loss on foreign exchange transactions- N153 billion
What you should know
Like its peers in the consumer goods industry, the current plight of Nigerian Breweries is not unique to it alone. Nigeria’s harsh macroeconomic environment in 2023 dealt a huge blow to the operations of both local and international manufacturing companies operating in Nigeria. Hence, there was significant exits and closures at the end of the year.
- The country’s inflation rate steadily climbed from 21.82% in January 2023 to its current figure of 29.90 for January 2024. This erodes consumer’s disposal income which hurts businesses in the industry NB finds itself.
- The removal of fuel subsidy contributed to the high inflation in the second half of the year coupled with the unification of the naira leading to the depreciation of the naira by over 100% contributed to the weak financial performance of company in focus.
What are they importing to make beer in Nigeria? They should try to use 100 percent local content.