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Nigerian Breweries records 57.4% decline in profit over COVID-19 lockdown

Nigerian Breweries Plc has released its latest earnings report for the half year (H1) period ended June 30, 2020 with profit dropping significantly by 57.4 per cent to N5.66billion from N13.3billion reported in prior half year results.

The COVID-19 lockdown impacted on revenue generation that eventually led to significant decline in profits.

The multinational company’s profit before tax also dropped by 56.6 per cent to N8.4billion in H1 2020 from N19.4billion reported in H1 2019.

Key factors to decline in profits include weak revenue and growing finance costs in the period under review.

In the results, Nigerian Breweries reported 10.8 per cent decline in revenue from N170.19bilion in H1 2019 to N151.8billion in H1 2019 while finance cost closed H1 2020 at N6.86 billion from N5.3billion reported in H1 2019.

Net finance income and expenses for the H1 period ended 30th June 2020 amounted to N6.9billion (H1 2019: N5 billion).

According to the company, Interest expenses for the H1 2020 amounted to N5.3 billion from N3.5billion reported in H1 2019.

“Other net finance expenses for the six-month period ended 30th June 2020 amounted to N1.6 billion (six month ended 30th June 2019: N1.8 billion expenses).

“The interest expenses on the net pension liability for the period ended 30th June 2020 amounted to N1 billion (six-month period ended 30th June 2019: N1.2 billion).”

The earnings per share for the period (both basic and diluted) declined to 71 kobo in h1 2020 from 166 kobo in H1 2019.

According to the company, “The continued spread of the coronavirus pandemic continues to impact all businesses. The Company’s priority remains protecting the health, safety and welfare of employees, customers and partners.

“At this stage, it is not possible to determine the financial impact of COVID-19 on the Company given the lack of visibility on the end date of the pandemic and its impact on the Nigerian economy.

“The Company regularly monitors and evaluates its financial position and performance in the light of the pandemic and would report thereon as may be appropriate.

“The Company has a strong Balance Sheet and the Board and Management will continue to focus on efforts to mitigate the impact of the pandemic on the business.

“To support the fight against the Covid-19 pandemic, the Company, during the period under review, made donations in cash and kind valued at about N531 million out of a phased commitment of N600 million to the Federal and State Governments’ Covid-19 Relief Funds.”

The company’s had profit before tax for the period under review stood at N8.2 billion in first quarter (Q1) 2020, as against N11.4 billion in first quarter of (Q1) 2019; therefore indicating a 27.7per cent decrease. In the same vein, profit after tax also decreased by 31.4 per cent to N5.5 billion in Q1 2020, down from N8 billion during the comparable period of Q1 2019.

Nigerian Breweries recently released its audited financial report for the full year ended December 31st 2019.

The report showed that the company’s revenue decreased by 0.4 per cent to N323 billion, down from N324.3 billion in 2018. Profit for the period also reduced by 17per cent to N16.1 billion, down from N19.4 billion.

Nigerian Breweries was incorporated in 1946 and is currently the leading brewer in Nigeria by market share.

The company’s share price ended last week’s trading on the Nigerian Stock Exchange at N31.00.

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