Nigerian Breweries Plc Report Worst Performance in 10 Years

Nigerian Breweries Plc, which recently released its 2023 results on performance and earnings, said that this is the worst record seen in over ten years. The Company said that this was due to the unification of the naira and the surge of inflation, which has triggered the increase in the costs of production.

The Company reported slow revenue growth following weak purchasing power, and other financial parameters such as cost of sales, operating expenses, and foreign exchange losses impacted the Group’s overall performance in the year under review.

However, Nigerian Breweries recorded its highest revenue in the 2023 financial year, following high pricing in some of its products. The Company generated N599.64 billion in revenue in 2023, which represented a 9% increase from the corresponding year, which settled at N550.64 billion in 2022. It was reported that 2022 signifies a 26% increase in revenue from N437.29 billion in 2021.

READ ALSO: Nigerian Breweries Plc: Company Profile, Overview, and Culture

The company revenue in Nigeria in 2023 stood at N599.31 billion from N550.43 billion in export revenue, moving from N210.53 million in 2022 to N335.47 million reported in 2023.

In 2023, Nigerian Breweries Cost of sales (CoS) rose to N387.03 billion, which signifies 15% from N337.331 billion in 2022.

The interchange between revenue and cost of sales led to N212.61 billion gross profit in 2023, which signifies an increase of 0.06% from N212.48 billion reported in 2022.

Nigerian Breweries CoS/Revenue in 2023 was 64.54% from the corresponding year, which settled at 61.3% in 2022, while the gross profit margin stood at 35.5% in 2023 from the corresponding year, which settled at 38.59% in 2022.

Nigerian Breweries’s total operating expenses (OPEX) finished  N171.13 billion in 2023, signifying an increase of 4.4% from N164 Billion reported in 2022.

Nigerian Breweries reported net loss on foreign exchange transactions moved to N153.33 billion in 2023 from N26.34 billion in 2022 as against N7.04 billion in 2021, and it is on the back of higher foreign exchange losses as exposure from its foreign currency-denominated payables, as reported by LEADERSHIP.

READ ALSO: Nigerian Breweries Plc Shareholders Finally Approve the Acquisition of an 80% Stake in Distell

Nigerian Breweries Finance income in 2023 closed at N513.24 million in 2023 from N349.19 million in 2022, while finance cost was at N36.39 billion in 2023 from N8.42 billion in 2022. The company Finance cost breakdown showed N35.06billiion interest expenses on loans and borrowings in 2023 from N7.2billion in 2022, while the unwinding of discount on employee benefits increased to N1.3billion in 2023 from N1.19billiion in 2022.

This brings net finance costs to N189.19 billion in 2023, representing an increase of 449.7% from N34.42 billion in 2022.

The LEADERSHIP also reported that the Nigerian Breweries recorded a loss before tax of N145.22 billion in 2023 from N17.34 billion profit before tax in 2022, and it declared N106.31 billion loss in 2023 from N13.19 billion profit after tax reported in 2022 

READ ALSO: Nigerian Breweries Plc Moves to Acquire Two Subsidiaries of Heineken for N7.01 Billion

Following the announcement of the 2023 report, the Company dropped a statement that read,

• The redesign of the naira notes, which resulted in a cash shortage that severely hampered social and economic activities nationwide, set the tone for a turbulent year. High double-digit inflation rates (with food inflation at more than 30%), removal of subsidy on premium motor spirit (fuel), devaluation of the naira, and foreign exchange scarcity further exacerbated the already challenging environment for the populace and businesses.

• Notwithstanding, the Company was able to grow its revenue by 9% compared to the previous year, aided by a positive price mix. However, the operating profit fell by 15% due to higher input costs and one-off reorganisation costs, despite strong and aggressive cost savings and other efficiency measures.

• Coupled with the impact of the devaluation of the naira, which resulted in a foreign exchange loss of N153 billion, the Company recorded a net loss of N106 billion during the year. In a challenging operating environment, the Board will ensure that the Company builds on its more than 77 years of experience operating in Nigeria to cope with current realities.

• The Company will continue to be resilient and forward-thinking, leveraging our broad portfolio, strong supply chain footprint and passionate workforce to drive long-term value creation for its shareholders and other stakeholders.