International Breweries Plc posted its financial result for the second quarter of 2024, recording a pre-tax loss of N61.81 billion.
This represents a decline from the N89.35 billion pre-tax loss recorded in the first quarter of the year.
When compared to the corresponding quarter of the previous year, the company’s losses rose from N37.31 billion in Q2, 2023.
However, in the first half of 2024, International Brewery Plc posted pre-tax losses amounting to N150.23 billion – an increase of 262.6% when compared to the N41.43 billion recorded in the first six months of 2023.
Key Highlights of the report
- Revenue- N119.98 billion from N61.73 billion in Q2, 2023
- Cost of sales- N86.22 billion from N41.29 billion in Q2, 2023
- Gross profit- N33.76 billion from N20.44 billion in Q2, 2023
- Admin and distribution expenses- N27.23 billion, from N18.78 billion in Q2, 2023
- Finance Income- N1.79 billion from N2.99 billion in Q2, 2023
- Net Finance cost- N21.90 billion from N5.59 billion in Q2, 2023
- Loss before tax- N61.81 billion from N37.31 billion in Q2, 2023
- Tax credit- N14.48 billion from NN16.02 billion in Q2, 2023
- Loss for the period- N47.32 billion from N21.28 billion in Q2, 2023
- Basic Earnings Per Share (EPS)- (N1.79k) from (N0.79k) in Q2, 2023
Commentary– Despite the increase in revenue for the company during the period under review, finance costs and administrative expenses coupled with raw materials and overhead costs contributed significantly to the continued losses from Q1, 2024 and Q2, 2023.
Raw materials and overhead costs increased by 95.51% from N38.11 billion in the second quarter of 2023 to N74.87 billion in the current period.
It is interesting to note that the company recorded a realised foreign exchange loss of N82.62 billion in Q2, 2024, a reversal of fortunes when compared to the realised foreign exchange gain of N7.97 billion in the corresponding period of last year.
Also, the company saw an unrealised gain of N33.06 billion in Q2, 2024 from an unrealised foreign exchange loss of N41.88 billion in the same period of 2023.
Furthermore, the company’s finance income declined by 67% year-on-year to N1.79 billion.
However, its interest payment on borrowings surged by 195.4% from N7.52 billion in Q2, 2023 to N22.22 billion in the period under review.
It also stated that interest on its overdraft to various commercial banks is payable at rates ranging from 25% to 30%.
It stated, “The overdraft facilities from various banks are all secured by a corporate guarantee from the Company. Interest on the bank overdrafts is payable at rates ranging from 25% to 30%.”
“The $424 million loan obtained from Citi Bank in 2018, which had an outstanding balance of $342 million as of the period ending March 2024, was settled in full during the reporting period.”
