Nigeria Breweries PLC’s Profit Declined By 77.5% In Q3

nigerian breweries

Nigeria Breweries, West Africa’s largest brewer said its gross income for the third quarter of the year was NGN65,3 billion.

The result was slightly above its Q3 2015 result which was NGN63,2 billion. The impact of a surging inflation has also  affected the group’s cost efficiency. Cost of sales rose to NGN41,9 billion compared to NGN35,7 billion expended last year.

Gross profit for the period fell below last year’s number to NGN23,4 billion versus NGN27,4 billion for last year.

The group is perhaps spending more money to distribute its products as its marketing and distribution expenses has gone up to NGN(13,8 billion versus last year when it spent NGN11,1 billion on the same items.

Analysts agree Nigeria Breweries has not increased its marketing expenditure significantly, it therefore means the rise in expenditure must be on it sales and distribution side of things.

Nigeria Breweries must have cut some sizable jobs across the group. Administrative expenses crashed to NGN5,6 billion compared to NGN7,5 billion last year. Across all items, Nigeria Breweries seems to have made serious savings from its overheads.

The entire burden of the economy, rising inflation and cost challenges led the company to post a smaller profit for the quarter. Net profit fell to NGN1 billion compared to last year when the group recorded NGN4,6 billion.

Nigeria Breweries is an arch-rival and a bigger operation compared to Diageo-backed Guinness Nigeria PLC. Guinness is yet to release its result. The company announced last month that it was declined by Diageo from buying more stake into the Nigerian operation.

Corporate information

Nigerian Breweries Plc, a public Company quoted on the Nigerian Stock Exchange, was incorporated in Nigeria on the 16th November 1946, under the name, Nigerian Brewery Limited.

The name was changed on 7th January 1957, to Nigerian Breweries Limited and thereafter to Nigerian Breweries Plc in 1990 when the Companies and Allied Matters Act of that year came into effect. The Company is a subsidiary of Heineken N.V. a company domiciled in the Netherlands, the latter having a 55.04% interest in the equity of Nigerian Breweries Plc.

The address of the Company’s registered office is 1, Abebe Village Road, Iganmu, Lagos. The condensed interim financial statements of the Company for the nine month period ended 30th September, 2016 comprise the Company and its subsidiaries.

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