Economy
International Breweries Posts N13.4bn Loss amid Rise in Marketing Costs
By Dipo Olowookere
The woes of International Breweries stretched into the fourth quarter of 2019 as both the top-line and bottom-line of the company’s Q4 results released on Friday were covered in blood.
The brewery company, which operates in a very harsh environment alongside its competitors as a result of tax on alcohol, saw its revenue for the period ended December 31, 2019 going down to N35.1 billion from N37.3 billion in the same quarter of 2018, with the cost of sales rising to N23.2 billion from N21.9 billion, mainly because of an increase in the materials consumed and allocated overheads.
It was also observed that administrative expenses significantly increased in the period under review to N8.3 billion from N3.7 billion, largely due to rise in the business running costs to N3.9 billion from N951.7 million, and depreciation, which inflated to N3.0 billion from N214.8 million, despite reduction in the salaries and allowances of administrative employees to N880.1 million from N2.0 billion.
Business Post further observed that marketing and promotion costs grew to N6.0 billion from N4.2 billion and a breakdown showed that, while the cost for transportation and distribution remained flat N3.0 billion over the two comparative periods, advertising and promotion broadly rose to N6.0 billion from N4.2 billion, while employee benefit expense deflated to N26.6 million from N38.8 million.
According the financial statements, other income, mainly from the sale of scrap, went down to N3.7 million from N17.8 million, while the gross profit reduced to N11.9 billion from N15.4 billion.
International Breweries recorded nothing for its finance income in Q4 2019 against N78.7 million in the corresponding quarter of 2018, while the finance cost increased to N9.2 billion from N7.0 billion, with the net finance costs at N9.2 billion in Q4’19 versus N6.9 billion in Q4’18.
The brewery, which has one of its flagship products, Trophy, leading the retail market in Nigeria in terms of sales, according to a research done by Business Post recently, declared a loss before tax of N13.4 billion in the last quarter of 2019 in contrast to a profit before tax of N1.1 billion in the same period of 2018.
Similarly, the company announced a loss after tax N9.1 billion compared with the profit after tax of N3.3 billion in the corresponding quarter of 2018.
This came despite the N5.6 billion income tax credit received by the firm in the last three months of last year in contrast to the N2.2 billion tax credit it got in the same time of two years ago.
By Adedapo Adesanya
The Nigeria Customs Service (NCS) is seeking a reduction in import duty exemptions, which rose to N34 trillion, limiting its ability to increase its revenue generation threshold.
The Comptroller-General of the Customs Service, Mr Adewale Adeniyi, disclosed that the value of import duty exemption certificate approvals increased to that level in 2025, describing the policy as one of the major factors restricting its revenue generation.
At an investigative session of the Senate Committee on Finance with revenue-generating agencies in Abuja on Monday, Mr Adeniyi explained that government fiscal policies have continued to impact the revenue-generating capacity of the Customs Service, both positively and negatively.
“The NCS would have generated significantly higher revenue over the years if not for government-approved import duty waivers and other external factors affecting collections,” he said.
He added that the Import Duty Exemption Certificate scheme, introduced in March 2020, accounted for about N34 trillion in approvals in 2025, with nearly 60 per cent covering duty-free importation of military hardware due to Nigeria’s prevailing security challenges.
Other government-backed duty waivers, he noted, covered the importation of Compressed Natural Gas (CNG), electric and hybrid vehicles, healthcare equipment and medical supplies, industrial machinery and manufacturing inputs, as well as food import intervention programmes.
While acknowledging the impact of the waivers on Customs revenue, Mr Adeniyi argued that fiscal policy should not be assessed solely on the basis of revenue generation but also on its broader economic and social objectives.
He, however, urged the federal government to establish stronger monitoring mechanisms to ensure beneficiaries of duty waivers deliver the intended economic outcomes, including lower consumer prices, increased local production and improved healthcare access.
The committee also expressed displeasure over the absence of several heads of government agencies invited to the hearing, including the Nigerian Civil Aviation Authority (NCAA), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Industrial Training Fund (ITF), and the Federal Medical Centre (FMC), Jabi.
The Chairman of the Senate Committee on Finance, Mr Sani Musa, warned that the affected chief executives must appear at the committee’s next sitting or face severe sanctions under the Senate’s rules.
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By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.40 per cent on Monday, July 13, buoyed by buying interest in 11 Plc, Central Securities Clearing System (CSCS) Plc and UBN Property Plc, which offset the profit-taking in Food Concepts Plc, the parent company of Chicken Republic.
11 Plc gained N20.69 to end at N227.64 per share compared with last Friday’s price of N206.95 per share, CSCS Plc grew by N1.83 to N91.48 per unit from N89.65 per unit, and UBN Property Plc added 1 Kobo to sell at N1.81 per share versus N1.80 per share.
On the flip side, Food Concepts Plc depreciated by 24 Kobo to close at N2.45 per unit, in contrast to the preceding session’s N2.69 per unit.
As a result, the market capitalisation increased by N9.2 billion to N2.587 trillion from N2.578 trillion, and the NASD Security Index (NSI) improved by 15.33 points to 4,311.67 points from 4,296.34 points.
Yesterday, the volume of securities traded by investors surged by 615.9 per cent to 9.1 million units from the previous 1.3 million units, and the value of securities rose by 997.1 per cent to N320.4 million from the preceding session’s N29.2 million, while the number of deals decreased by 12.5 per cent to 28 deals from last Friday’s 32 deals.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 73.9 million units exchanged for N5.2 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
