Nigerian Breweries PLC, a leading alcoholic beverage company in Nigeria, has recently released its unaudited financial statement for the first six months of 2024. Despite facing significant economic challenges, the company has demonstrated notable strength in its financial performance.
The financial statement reveals a 34% increase in net operating profit for the first half of 2024. Additionally, revenue surged by 73%, reaching an all-time high for a six-month period at N479.8 billion, up from N277.4 billion in the previous year. This growth was driven by strategic pricing, innovation, increased volume, and market recovery.
However, the company faced substantial financial pressures. After-tax losses deepened to N85.2 billion, nearly doubling the N47.6 billion loss recorded in the same period of 2023. This increase in losses is attributed primarily to a significant rise in foreign exchange losses, which climbed to N112.3 billion compared to N85.26 billion in the previous year. Despite the revenue surge, gross profit growth was limited to 42% due to a 93% spike in the cost of goods sold, driven by currency devaluation and inflation.
Finance income increased to N332.5 million from N185.6 million, while finance costs rose sharply to N42.5 billion from N11.2 billion. Uaboi Agbebaku, the company secretary and legal director, attributed the revenue growth to strategic pricing, innovation, and market recovery. However, he noted that the gross profit growth rate was hindered by high input costs and inflationary pressures.
Agbebaku emphasized the company’s efforts to navigate the challenging operating environment marked by high inflation, exchange rate volatility, and rising input costs. Despite these challenges, Nigerian Breweries managed a 34% increase in operating profit, reflecting successful cost-saving and efficiency initiatives. Nonetheless, this improvement was offset by a 79% rise in net loss, largely due to foreign exchange losses and high-interest expenses.
Hans Essaadi, Managing Director/CEO of Nigerian Breweries PLC, remarked on the company’s resilience and progress despite the difficult external conditions. He highlighted the 73% revenue growth and the company’s ongoing investments in brand development and market recovery. Essaadi also disclosed plans for a rights issue aimed at raising up to N600 billion in additional capital. This initiative is intended to restore profitability and enhance operational stability by addressing foreign exchange and local debt challenges.
Essaadi reassured stakeholders of the company’s commitment to its long-term strategy and its focus on delivering shareholder value while contributing to Nigeria’s economic growth and development.
