NIGERIA – International Breweries, a subsidiary of global beverage leader AB InBev, has reported a significant increase in its after-tax loss, reaching N112.8 billion (US$66.6M) in the nine months of 2024 compared to N28.56 billion (US$16.95M) in the same period last year.
The company attributed this fourfold rise in losses primarily to escalating costs and foreign exchange impacts.
Over this period, the company’s expenses surged to N147.6 billion (US$87.6M), up from N36.2 billion (US$21.49M) in 2023, with cost of sales also increasing to N248.6 billion (US$147.58m from N126.4 billion (US$75.04M).
The brewer saw revenue growth during the nine-month period, recording N343.4 billion (US$203.86M) compared to N183.8 billion (US$109.1M) in 2023.
However, the benefit of this revenue increase was tempered by rising expenses, as the company’s net finance costs rose sharply to N29.2 billion (US$17.3M) from N11.1 billion (US$6.59M).
Chairman of the board of directors, Obi Achebe, emphasized that addressing foreign exchange-denominated loans would be pivotal in restoring the company to a sustainable profitability path.
Achebe commended recent progress on the company’s N588 billion rights issue, which is intended to bolster cash flows and eliminate exposure to foreign exchange (FX) fluctuations.
The rights issue, which opened on May 21, 2024, offers six new ordinary shares for every share held by existing shareholders, at a price of N3.65 per share.
The program is set to close on June 10, 2024. Non-shareholders interested in acquiring rights can do so on the Nigerian Exchange through stockbrokers, enhancing liquidity and accessibility for investors.
According to Achebe, AB InBev’s support in the rights issue highlights the group’s confidence in the Nigerian market and its growth potential.
“The elimination of our FX exposure will improve IBPLC’s cash flows and will support the company’s return to profitability. The offer was supported by our core shareholder, Anheuser-Busch InBev who followed their rights in full,” he stated.
David Tomlinson, Finance Director of International Breweries, noted that the company remains committed to creating long-term value for shareholders and strengthening its position in Nigeria’s beverage industry.
“Together, we will continue to brew success, deliver long-term value for our shareholders, and create a future with more cheers,” Tomlinson said.
In August, the Nigerian Exchange Limited granted International Breweries a two-year extension for free float compliance, set to expire on July 30, 2024.
This development ensures that International Breweries can continue to meet trading requirements and uphold investor confidence as it pursues financial stability.
AB InBev acquired International Breweries’ parent company SABMiller in 2016, bringing its Nigerian subsidiaries under the International Breweries label in 2017.
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