NIGERIA – Champion Breweries Plc, producer and marketer of alcoholic and non-alcoholic beverages in Nigeria, registered a fivefold surge in full year profit from N159 million (US$328,000) in the corresponding period of 2020, to N984 million (US$2.73m).
The 520% growth was driven by significant growth in sales of the company’s products, especially Champion Beer and Champ Malta.
This delivered a revenue of N10.10 billion (US$24.29m) in the full-year period ended December 2021 compared to N5.89 billion (US$2.37m) in the same period of 2020, representing 71.38% jump.
The drinks maker attained the remarkable performance during a period characterized with double-digit food inflation, brought about by persistent increase in prices of goods and services, thereby resulting in inflationary pressures that affected both consumers and producers.
The company also earned income from third-party contracts, which entails brewing and packaging agreements. This raked in N421 million (US$1.01m) in 2021, compared to N1.16 billion (US$3.87m) in 2020, suggesting that the company was not awarded as many contracts in 2021 compared to the prior year.
In addition, the company also made money from other income lines, including sale of scraps, by-products and packaging materials which generated a combined N109 million (US$262,000) during the period. Also, the company earned interest income on short-term deposits during the period.
Champion Breweries Plc full-year revenue performance was subdued by an 80% rise in the cost of raw materials, which also affected profit as a trickled down effect.
During the period under review, Raysun Nigeria Limited, subsidiary of Heineken N.V, acquired additional 24.3% stake in the company comprising of 12.2% interest previously held by Asset Management Nominee and 12.1% from other minority shareholders.
The transaction helped to raise the ownership stake of Raysun from about 60.5% recorded as of 31st of December 2020 to 84.7%, giving the company the leverage to launch a takeover bid.
In the subsequent year, January 2022, the Securities and Exchange Commission gave authority to Raysun to proceed with the Mandatory Takeover Offer (MTO) for the remaining 1,196,799,164 ordinary shares from minority shareholders of Champions Breweries representing 15.3% stake.
Incorporated in Nigeria in 1974, Champion Breweries started bottling beer in 1976, with an initial capacity of 150,000 hectolitres of beer and 10,000 hectolitres of malt drink.
Heineken began heaping up stake in the company in 2013 when it took a strategic position in the company by procuring 57 per cent equity which was originally held by Montgomery Ventures Inc (Panama) through Raysun.