Nigerian Breweries Plc (NGX: NB) has posted a loss of ₦106.30 billion for the financial year ended 31 December, 2023, a 906.2% negative swing from the ₦13.18 billion profit it posted in 2022.
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In an earnings release signed by the Company Secretary, NB attributed the loses to shifts in the Nigeria business landscape in the year in review.
First was the redesign of he naira notes which resulted in cash shortage that severely hampered social and economic activities nationwide.
High double-digit inflation rates (with food inflation at more than 30%),
removal of subsidy on premium motor spirit (fuel), devaluation of the naira, and foreign exchange scarcity further exacerbated the already difficult environment for the populace and businesses, says the company in its press release.
Notwithstanding, the Company was able to grow its revenue by 9% compared to the previous year aided by positive price mix.
However, the operating profit fell by 15% due to higher input cost and one-off reorganisation cost despite strong and aggressive cost savings and other efficiency measures.
Coupled with the impact of the devaluation of the naira which resulted in a foreign exchange loss of N153 billion, the Company recorded a net loss of N106 billion during the year.
The Board of Directors of the company will not recommend the payment of dividend for the year to Shareholders. In 2022, it recommended and paid a final dividend of ₦1.03.
Analysis of Statement of Profit or Loss and Other Comprehensive Income
Revenue: ₦599.64 billion was reported in 2023, 8.9% growth on the ₦550.63 billion reported in 2022.
₦599.30bn (2022: ₦550.426bn) revenue was earned from sales in Nigeria, while ₦0.33bn (2022: ₦20.21bn) was earned from exports.
NB spent ₦387.03bn selling its goods, 14.7% lower than the ₦337.31bn it spent in the preceding year.
Gross Profit: The company posted a gross profit of ₦212.61bn, 0.3% lower than the ₦213.32bn it posted in the preceding year.
Marketing, Distribution & Administrative Expenses: ₦171.60bn was spent in 2023, 4.5% lower than the ₦164.55bn spent in the preceding year.
Raw materials and consumables took ₦286.06bn, while Transportation, Employee benefits and Advertising & sales promotion took ₦64.94bn, ₦55.49bn and ₦45.03bn respectively.
Net Finance Cost: NB reported a net finance cost of ₦189.18bn for the year in review against ₦34.41bn cost booked in the preceding year.
While ₦0.51bn came in a finance income, ₦36.36bn was booked as finance cost, and a whooping ₦153.33bn was reported as net loss on foreign exchange transactions.
Loss before taxation: ₦145.22bn was reported, 899.7% turnaround from the ₦17.34bn profit before tax reported in the preceding year.
Profit for the period: NB posted a loss after tax of ₦106.30bn for the year, a 859.6% reversal from from the ₦13.18bn it posted in 2022.
Analysis of Statement of Financial Position:
Assets: The company’s total assets rose to ₦795.87 billion from ₦619.88 billion.
Liabilities: Total liabilities rose to ₦732.58 billion from ₦439.97 billion.
The company has ₦136.28bn loans and borrowings under non-current liabilities and another ₦205.31bn loans and borrowings under current liabilities.
Equity: The total equity dropped to ₦63.28bn from ₦179.91bn.
Share premium represents a bulk of the equity with ₦82.94bn, while it has a retained loss of ₦26.26bn.
Analysis of Statement of Cash Flow
Net cash of ₦74.66bn was used in operating activities, against ₦22.52bn generated in 2022.
Net cash of ₦98.44bn was used in investing activities, against ₦99.25bn used for the same activity in 2022..
Net cash of ₦174.14bn was generated from financing activities in 2023, against ₦82.05bn generated in 2022.
At the end of the period, the company has a cash and cash equivalent of ₦39.56bn (31 Dec. 2022: ₦22.18bn).
About the company
Nigerian Breweries Plc, a public company quoted on the Nigerian Stock Exchange, was incorporated in Nigeria on the 16th November 1946. The name was changed on the 7th January 1957, to Nigerian Breweries Limited and thereafter to Nigerian Breweries Plc in 1990 when the Companies and Allied Matters Act (now repealed) of that year came into effect.
The Company is a subsidiary of Heineken N.V. of the Netherlands, the latter having approximately 57% interest in the equity of Nigerian Breweries Plc. The address of the Company’s registered office is 1 Abebe Village Road, Iganmu, Lagos. The Company is primarily involved in the brewing, marketing and selling of lager, stout, non-alcoholic drinks and soft drinks.
As a consequence of the merger with Consolidated Breweries Plc in 2014, the Group comprises of the Company and its 89.3% majority equity interest in Benue Bottling Company Limited (BBCL). The subsidiary, BBCL, was an entity with no business activities that held land, buildings and some idle production assets. The company has now been liquidated.
234 Stores Limited is also a subsidiary of the Company which was incorporated on 7th November 2018 to explore opportunities in the route-to-market. The subsidiary became fully operational in 2020.
The company has issued and fully paid-up Share Capital of the Company as at 31st December 2023 was 10,276,132,378 Ordinary Shares of 50 kobo each. The Register of Members shows that three companies: Heineken Brouwerijen B.V. (38.32%), Distilled Trading International B.V. (15.63%) and Stanbic Nominees Nigeria Limited (11.40%) held more than 10% of the Company’s issued share capital as at the said date.
The remaining 34.65 % of the issued shares were held by other individuals and institutions, including Heineken International B.V. (2.74%), a member
of the Heineken N.V. Group. Aside the aforementioned three companies, no other shareholder held more than 5% of the issued share capital of the Company as at 31st December 2023. Heineken Brouwerijen B.V. and Distilled Trading International B.V. are also part of the Heineken N.V. Group. The total beneficial interest held by Heineken N.V. Group in the Company’s issued share capital as at the aforementioned date was 56.69%.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur