Nigerian Breweries posts 31.4% decline in profit in the first quarter

NIGERIA – Nigerian Breweries Plc has released its latest earnings report for the first quarter period ended March 31st, 2020.

The financial report showed that the brewers’ profit decreased significantly by 31.4% to N5.5 billion (US$14m) against N8 billion (US$20.4m) declared in corresponding period of 2019.

The company’s net revenue for the period under review stood at N83.2 billion (US$213.1m) a decrease of 0.09% compared with N83.3 billion (US$213.4m) achieved in Q1 of 2019.

Meanwhile, the brewer’s cost of sales increased slightly by 0.23% to N48.3 billion (US$123.7m), up from N48.2 billion (US$123.4m) during the comparable period of Q1 2019.

Marketing, distribution, and administrative expenses also grew by 13.9% to N24 billion (US$61.4m), from N21 billion (US$53.7m) recorded in the preceding period of 2019.

Mr. Uaboi Agbebaku, the Company Secretary/ Legal Director noted that the COVID-19 crisis continued to impact businesses, with the effect expected to be more pronounced in the future.

Agbebaku said that it was not possible to determine the financial impact of the COVID-19 crisis due to a lack of visibility on its end date.  He, however, noted that the company had a strong balance sheet and its board and management remained focused on mitigating the impact of the pandemic on its operations.

In light of the outbreak of the pandemic the brewer has donated N600 million (US$1.5m) to the Federal and some state governments, to support the fight against COVID -19 in Nigeria.

Managing Director, Nigerian Breweries, Jordi Borrut Bel explained that the N600 million donation comprises of a N250 million (US$0.6m) cash donation to the government through the Coalition Against COVID-19 (CA-COVID), the private sector led special intervention fund managed by the Central Bank of Nigeria (CBN); N250 million (US$0.6m) cash donation to 7 State Governments’ Task Force Against COVID-19.

According to him, Lagos and Ogun States will receive the sum of N100 million (US$0.25m) and N50 million (US$0.12m) respectively being COVID-19 frontline states while five other states of Kaduna, Oyo, Enugu, Abia and Imo will get N20 million each (US$51,000).

Also, N100 million worth of relief materials will be spent to provide 5 double-cabin vehicles for use by the National Centre for Disease Control (NCDC) in Abuja, Lagos, Ogun and Kaduna States.

He said, “This is to help meet their critical operational needs, especially contact tracing and movement of materials/personnel to isolation and treatment centres. The cost of fuel, maintenance and driver’s salaries will also be covered by Nigerian Breweries.

“Personal Protective Equipment such as face masks, 500 gowns and 141,000 units of hand sanitizers for nationwide distribution to our key states. Supply of malt, energy and soft drinks to the various Covid-19 NCDC centres nationwide. This will be done over a period to ensure steady support and to meet the nourishment needs of the Centres during the crisis.”

lordi Bel stressed that the company has already taken various steps to ensure that it continues to protect the jobs of its 3000 employees, while supporting its vendors/suppliers during this difficult period.

He added that these contributions are in line with the company’s belief that public-private partnership is essential to overcome the threat of the COVID-19 virus.

Cheque presentations have already been made to the Ogun and Lagos State governments with other states to receive their donations in the coming days.

The parent company of Nigerian Breweries, the Heineken Company had previously donated 15 Million Euros (US$16.1m) to the International Red Cross and Red Crescent Society to support their relief efforts towards the most vulnerable people and communities affected by COVID -19 especially those in Africa, Asia and Latin America.

Also, Heineken Africa Foundation has decided to replace its regular grants and projects this year with a plan to spend up to 5 million euros (US$5.3m) in partnership with various NGOs in Africa to significantly upscale and accelerate its WASH program, which focuses on providing access to safe water, sanitation and hygiene.