Nigerian Breweries Woes Sink Q1 2019 Profit by 22%

April 25, 2019
Nigerian breweries more consumers

By Dipo Olowookere

Since the Nigerian government introduced a new excise duty regime last year, which saw a rise in tax on alcohol and tobacco, Nigerian Breweries has been struggling. This had an effect on the company’s financial statements for the year ended December 31, 2018.

On Wednesday, the brewery giant, which faces a huge competition from other firms in its industry, released its financial scorecard for the first quarter of 2019.

A brief analysis of the results by Business Post showed that things are still gloomy, though revenue generated by the brewer improved in the period under review.

According to the financial statements, a total of N91.4 billion was netted as revenue in the first three months of this year against N88.5 billion in the same period of last year.

Nigerian Breweries said it paid N8.1 billion on excise duty in Q1 2019 compared with the N5.5 billion in Q1 2018, bringing its net revenue in the period under consideration to N83.3 billion versus N83 billion a year ago.

The company said in the first quarter of this year, its cost of sales increased, gulping N48.2 billion in contrast to N45 billion, leaving it with a gross profit of N35.1 billion, lower than N38 billion in the corresponding period of last year.

It was further revealed that the marketing and distribution expenses in Q1 2019 increased to N16.6 billion from N15.3 billion in Q1 2018. However, the administrative expenses reduced to N4.6 billion from N5.2 billion.

In the period under review, the finance income reduced to 9.4 million from N37.8 million, while the finance costs rose to N2.6 billion from N2.5 billion.

For the bottom line, the profit before tax depreciated to N11.5 billion from N15.3 billion, while the profit after tax closed at N8 billion against N10.2 billion a year ago, representing a 21.6 percent decline.

Also, the earnings per share, which gives a view of the profit made by each share of a company in a reviewed period, dropped to N1 from N1.28k.

Nigerian Breweries said during the three-months period ended March 31, 2019 it acquired, plant and equipment with a cost of N7.5 billion versus N6.7 billion a year ago.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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