CBN’s naira redesign policy trims Nigerian Breweries earnings 10.5% to N137bn
By Onome Amuge
Nigerian Breweries has attributed the naira redesign policy of the Central Bank of Nigeria (CBN) for the 10.5 per cent decline in revenue which stood at N123.3 billion in the first quarter of 2023 from N137.7 billion recorded in the first quarter of 2022.
The pioneer and largest brewing company in Nigeria, in its unaudited condensed interim financial statements for the three months ended 31st March, 2023, noted that the impact of the cash scarcity during the period and the effects on operating expenses and high input resulted in a loss of N10.7 billion between January and March 2023.
The financials, approved by the board of directors,also showed that gross profit declined by 29.7 per cent to N43.88 billion in the review period, from N62.45 billion recorded in the first quarter of 2022.
The brewing company listed on the Nigerian Stock Exchange under the beverages sector also posted a disappointing profit after tax which dropped to N10.7 billion in Q1 2023 against N13.61 billion recorded during the same period in 2022.
According to Nigerian breweries, operating cost, which includes selling, distribution & admin. expenses rose 7.1 per cent to N42.35bn in Q1 of 2023, up from N39.3 billion recorded in the corresponding period of 2022.
Net finance expenses also followed an upward trend, rising 552.5 per cent to N19.3 billion, up from N2.96 billion recorded in 2022.
Commenting on the disappointing financial performance, Nigerian Breweries stressed that the operating environment during the period under review was very challenging for businesses. The company also noted that the impact of the cash crunch which led to a near collapse of payment channels as well as the security and safety uncertainties associated with the general elections, created disruptions in the economy.
These, it noted further, were in addition to the continuing headwinds of inflationary pressure with its impact on purchasing power, input cost, and operating expenses.
According to Nigerian Breweries, the total brewed product market suffered a double-digit (mid-twenties) volume decline versus the same period in 2022.
However, the company said it was able to largely mitigate the volume decline impact on revenue due to the implementation of appropriate pricing strategy.
“Our operating profit was further impacted by a one-off reorganisation cost with a view to refreshing and restructuring the business to cope with current challenges for a sustainable future,” it stated.