NIGERIA – Nigerian Breweries Plc has reported a significant revenue increase of 74.4 percent for the first nine months of 2024, reaching N703 billion (US$423M), up from N403 billion (US$242.5M) in the same period of 2023.
This strong revenue performance was disclosed in the company’s unaudited results submitted to the Nigerian Exchange Group (NGX).
According to Nigerian Breweries, its gross profit rose by 36 percent, totaling N207 billion compared to N152 billion (US$91.5M) in the same period last year.
However, this growth was overshadowed by a steep rise in the cost of goods sold (COGS), which nearly doubled, largely due to currency devaluation and increased input costs.
The COGS jumped from N249 billion (US$149.8M) in 2023 to N495 billion (US$297.8M) in 2024, with marketing, distribution, and administrative expenses also rising by 45 percent from N127 billion in 2023 to N184 billion (US$110.7M) in the current year.
Managing Director and CEO of Nigerian Breweries Plc, Hans Essaadi, acknowledged the challenges facing the business environment, including high inflation, currency devaluation, and surging input costs.
Despite these challenges, he commended the company’s resilience and attributed the revenue growth to strategic pricing adjustments, product innovations, and gradual market recovery.
“Revenue grew by 75%, benefitting from strategic pricing, innovation, and market recovery,” Essaadi stated.
However, foreign exchange losses have impacted the company’s net profit, largely due to the naira’s devaluation and higher interest rates, which have raised borrowing costs.
Nigerian Breweries hopes to mitigate these financial pressures through funds raised via a recent rights issue, which offered 22.6 billion ordinary shares in September, aiming to raise N599.1 billion (US$365.3 million).
These funds will primarily be used to settle outstanding payables, including N328 billion in foreign exchange (FX) debt and N263 billion in local obligations.
This financial move follows a reported after-tax loss of N85.3 billion (US$52 million) for the first half of 2024, reflecting the challenging economic landscape the company faces, including escalating FX costs and rising inflation.
Heineken, the company’s parent holding a 67 percent stake in Nigerian Breweries, has temporarily suspended interest on its foreign loan to alleviate financial strain.
In an effort to boost profitability, Nigerian Breweries has also expanded its portfolio by acquiring Distell Nigeria, marking its entry into the wine, spirits, and ready-to-drink segments.
This acquisition is expected to enhance the company’s long-term profitability and strengthen its position in Nigeria’s beverage market.
The board remains optimistic about its long-term strategy, reaffirming its commitment to creating shareholder value through strategic innovation, operational efficiency, and community impact.
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