Nigeria’s largest brewer by revenue, Nigerian Breweries Plc posted a pre-tax loss of N50.8 billion for the quarter ending June 30, 2023.
It marks a marginal 0.7% year-on-year decline from the N50.4 billion pre-tax loss posted in Q2 2023.
During the quarter, Nigerian Breweries posted a revenue of N251.8 billion, marking a 63% year-on-year growth from N154.1 billion posted in Q2 2023.
The group posted a revenue of N479.8 billion in the first half of 2024, marking the highest revenue ever posted by a Nigerian brewer in six months. The revenue of H1 2024 was a 73% year-on-year growth from the N277.4 billion revenue recorded in H1 2023.
Nigerian Breweries Plc posted a net loss of N33.1 billion during the quarter under review, marking a 10% appreciation from the N36.9 billion net loss posted in Q2 2023.
Despite its impressive revenue showing, the group’s operating profit declined by 51% year-on-year to N12.9 billion in Q2 2024 from N26.5 billion as of Q2 2023. According to the financial statements, there was a 50% YoY increase in selling and distribution expenses during the quarter to N52.1 billion, compared to N34.8 billion in Q2 2023
Nigerian Breweries also provisioned N2 billion as credit loss on its financial assets in Q2 2024, in contrast with N133 million as of Q2 2023.
The group recorded a net FX loss of N39.4 billion in the second quarter of the year. However, the loss declined by 44% YoY from N70.6 billion FX loss posted in Q2 2023.
Key Highlights Q2 2024 vs Q2 2023
- Revenue: N251.8 billion, +63% YoY
- Cost of sales: N174.0 billion, +103% YoY
- Gross profit: N77.8 billion, +14% YoY
- Selling and distribution expenses: N52.1 billion, +50% YoY
- Operating profit: N12.9 billion, -51% YoY
- Operating margin: 5%, -12 percent-points YoY
- Profit/(loss) before tax: (N50.8 billion), -0.70% YoY
- Profit/(loss) for the period: (N33.1 billion), +10% YoY
- Total assets: N948.6 billion, +1% YTD
Commentary: Nigerian Breweries like many other manufacturing companies were thrust into the loss-makers category in 2023, after the abrupt devaluation of the Naira. The company’s accrued losses into 2024.
Despite the stable Naira, Nigerian Breweries must battle rising inflationary pressures as well as rising interest rates to stay afloat. In the first six months of 2024, the group’s current liabilities have appreciated by 23% to N717.4 billion, from N584.5 billion at the end of 2023.
Its loans and borrowings due within the 12 months also appreciated by 70% to N348.9 billion, from N205.3 billion at the end of 2023. As the group battles rising liabilities, the company is neck deep in negative equity, as its negative equity is now at N21.2 billion, from N19.5 billion at the start of the year.
During the period, Nigerian Breweries took loans of about N347.7 billion, while it repaid loans of about N151.1 billion. The group also spent about N22.4 billion on interest payments during the half-year.
In six months, the group accrued an expense of N256.4 billion on raw materials, marking a 118% year-on-year increase from N117.6 billion spent on raw materials in H1 2023.
