NIGERIA – Nigeria’s leading brewing company, Nigerian Breweries Plc, has announced a significant net loss of N106 billion (US$70.96M) for the fiscal year ended December 31, 2023.

The company attributes the substantial loss primarily to the adverse impact of the devaluation of the naira on its foreign exchange transactions. 

In its audited results released to the Nigerian Exchange Limited (NGX), Nigerian Breweries disclosed a 9 percent increase in revenue compared to the previous year, reaching a total operating profit of US$29.79 million in 2023.  

However, this marked a 15 percent decline from the corresponding period in 2022, citing factors such as rising input costs, a one-off reorganization expense, and broader economic pressures. 

Mr. Hans Essaadi, the Managing Director/CEO of Nigerian Breweries Plc, acknowledged the challenging economic conditions in Nigeria during 2023, including cash scarcity, the removal of fuel subsidies leading to increased energy costs, naira devaluation, foreign exchange scarcity, and constrained consumer spending amidst high inflation. 

Despite the hurdles, Essaadi noted some progress, citing a 9 percent revenue growth facilitated by a positive price mix. However, he highlighted that these efforts were undermined by the devaluation of the naira, causing a staggering US$102.428 million loss on foreign exchange transactions. 

“Our reaction to the challenges presented by the tough economic terrain was centered around reducing risk to the business by focusing on a positive price mix, efficient sales operations, strong and aggressive cost management, and other efficiency measures,” Essaadi explained. 

Looking ahead, Essaadi expressed awareness of the persistent macro-economic challenges, including rising inflation, heightened operating costs, and pressured consumer income spend. 

Nevertheless, he expressed optimism, stating, “The challenges of 2023 have laid the groundwork for opportunities that would lead to value creation for all our stakeholders.” 

One such opportunity is the recent acquisition by Nigerian Breweries of an 80 percent stake in Distell Wines and Spirits Limited, a local business in the wines and spirits category.  

The company also secured exclusive rights to import all Heineken beverages wines, spirits, and ciders brands from South Africa, including a license to market and distribute these products in Nigeria, as well as the option to produce any of the imported brands locally. 

Essaadi emphasized that this strategic acquisition aims to provide access to a complementary multi-category portfolio of fast-growing wines and spirits brands, capturing significant growth opportunities in the beverages industry. 

“The Board and Management will ensure that the Company builds on its more than 77 years’ experience of operating in Nigeria to cope with current realities. The Company will continue to be resilient and forward-thinking, leveraging our broad portfolio, strong supply chain footprint, and passionate workforce to drive long-term value creation for its shareholders and other stakeholders,” concluded Essaadi. 

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. HERE