International Breweries Plc reports N336.20mn profit for H1 2022

International Breweries Plc (NGX: INTBREW), makers of “Hero” Lager has reported a Profit After Tax of N336.20mn for the half year period ended 30 June, 2022, a 102.2% upward push from the N13.88bn loss it reported for the same period in 2021.

The brewer, which is mentioned more often these days due to the Investment made by Anambra State Government when Peter Obi was the Governor. This more so, because of the candidacy of Peter Obi for the position of President under the Labour Party in the forthcoming general elections.

The then Peter Obi led administration had invested N1.95 billion in Intafact Beverages Limited, a green-field brewery being set up in Onitsha by SABMiller Breweries of South Africa in 2012.

Intafact Beverages was subsequently consolidated into International Breweries Plc when the parent company, SABMiller of South Africa was acquired by Anheuser-Busch InBev (AB InBev), the world’s largest brewer.

Based on this development, AB InBev consolidated and merged all its brewery operations in Nigeria under International Breweries Plc and all shareholders of Intafact Beverages Limited, including Anambra State Government (ANSG), received shares of International Breweries Plc for their respective investments.

ANSG received and still holds 407,321,264 ordinary shares of International Breweries Plc in exchange for its investment in Intafact Beverages Limited. This represents 1.51% ownership in International Breweries, which has 26.86 billion outstanding.

On Friday 29th July, 2022, INTBREW released it’s unaudited condensed financial statements for the half year period ended 30 June, 2022.

Analysis of the Financial Statements

Income Statement:

Revenue: N111.40bn, compared to N81.96bn earned in H1 2021, a 35.92% YoY growth.
Gross Profit: N36.60bn, a 137.43% increase from the N15.41bn profit reported in H1 2021. Its gross profit margin improved from 32.86% to 18.81%, as it book a relatively lower cost of sales; N74.79bn , 12.40% higher than the N66.54bn it spent in H1 2021.
Administrative Expenses: N28.72bn, a 41.89% YoY increase from the N20.24bn it spent in H1 2021. The increase in administrative expenses was primarily due to the increase in cost of materials consumed and allocated to overheads, which went up from N48.87bn in H1 2021 to N25.95bn in H1 2022.
Finance Income & Cost: INTBREW paid an interest of N4.52bn on its borrowings, against the N821mn it paid as interest in H1 2021.
Profit Before Tax: N18.24 Billion, compared to a loss before tax of N17.22 Billion in H1 2021 (205.94% YoY Growth);
Profit After Tax: N336 million, compared to a loss of N13.88 Billion in H1 2021 (102.42% YoY Growth).
Earnings Per Share: 1 kobo (None in H1 2021).

Balance Sheet:

Total Assets: N390.13 Billion, compared to N469.95 Billion as at 31st December 2021 (16.98% Decline). Of these assets, N248.72bn is on property, plant and equipment under non-current assets, while N22.16bn is current asset being cash and ban balances. The company’s inventories stood at N25.97 billion, while its trade and other receivables was N14.76bn. It holds deferred tax assets of N24.87bn.
Total Liabilities: N252.11 Billion, compared to N334.64 Billion as at 31st December 2021 (24.66% Decrease). The drop in Liabilities was because of the huge drop in Trade and Other payables, from N175.4bn on 31st Dec. 2021 to N110.79bn. The other major component of the Brewer’s liability is the N122.87bn it has under Derivative Financial instruments.
Shareholders’ Fund: stood at N138.01 Billion, a 2.01% increase from N135.30 Billion as at 31st December 2021.
Retained earnings: The company still has a big hole to plug with regards to its earning, as it hold a minus N36.34bn as retained earnings (31 Dec. 2021: 0.92%).

Cashflow:

Operating activities: N6.84 billion was generated from operating activities, against N21.21 billion generated in H1 2021.
Investing activities: N20.81 billion was the net inflow from investing activities, against a net inflow of N1.10bn in H1 2021. The positive boost was due to a N40.36 inflow from investment in debt securities.
Financing activities: N66.84 billion was used in financing activities, against N821.91mn in H1 2021. While the brewer made no loan repayment in H1 2021, it made a repayment of N62.30bn in H1 2022.
Cash and cash equivalents at the end of the period was N27.61 billion (H1 2021: N72.29 billion).

There was no corporate action announcement following the release of the financial statements.

About the Company

The Company was incorporated in Nigeria as a private limited liability Companyon22 December 1971 under the Companies and Allied Matters Act, and is domiciled in Nigeria. The Company became a public limited liability Company on 26 April, 1994. The address of its registered office is: Plot 5A Abuja Street, Banana Island, Ikoyi, Lagos.

The principal activities of the Company are brewing, packaging and marketing of beer, alcoholic flavoured/ non-alcoholic beverages and soft drinks. The parent Company is AB InBev Nigeria Holdings BV, the ultimate parent Company is Anheuser-Busch InBev SA/NV.