By Dipo Olowookere

The national scale issuer ratings of BBB+(NG)/A2(NG) have been assigned to Champion Breweries Plc by GCR Ratings.

In a statement obtained by Business Post, GCR noted that it also gave a stable outlook to the brewer because it foresees the brewery firm remaining profitable and sustaining strong gearing and liquidity metrics despite the expected rise in debt.

However, it emphasised that its rating could be downgraded if the organisation experiences a higher-than-expected rise in debt which leads to a deterioration in leverage metrics and creates refinancing risk.

“Also, unfavourable working capital movement that places pressure on operating cash flow and weakens liquidity would negatively impact the ratings,” a part of the statement said.

The rating agency assured Champion Breweries that an upgrade could happen if there is an improvement in its business scale as well as better product and geographical diversification which supports robust cashflows.

Champion Breweries operates on a much smaller scale with current installed production capacity at 500,000 hectolitres per annum (hlpa) compared with other peers that can produce more than 5 million hlpa.

It has only two brands, Champion lager beer and Champ Malta, and operations are all within the Southern region of Nigeria with around 60 per cent of revenue generated from Akwa-Ibom state, but its favourable cost model has supported EBITDA margin above peer average.

The company has no interest-bearing debts, therefore, EBITDA coverage of interest has remained strong at above 10x over the five-year period to 2024.

But its debt is expected to rise due to plans to borrow N5 billion from the Bank of Industry (BOI) to part finance the acquisition of an empty bottle inspection machine and installation of a canning line.

Champion Breweries intends to ramp up capacity utilisation to 80 per cent in 2025 from 69 per cent in 2024 and drive volumes to underpin a further growth in revenue.

In the 2024 fiscal year, the organisation grew its earnings to N20.9 billion from N12.7 billion in the previous year due to higher volumes and upward price adjustments.

The brewer has remained profitable, especially due to its reliance on local supplies, helping to hedge against foreign exchange volatilities. Hops and barley are the company’s major inputs and they are mostly sourced from local suppliers rather than direct importation.

Champion Breweries is majorly owned by a non-operational company, Raysun Nigeria Limited.

By Dipo Olowookere

Sustained buying pressure, especially in the banking sector, pushed the Nigerian Exchange (NGX) Limited higher by 0.45 per cent on Wednesday.

According to data obtained from the bourse, the banking index was up by 2.12 per cent, the consumer goods space rose by 2.11 per cent, and the industrial goods sector improved by 0.15 per cent.

However, the other sectors came under profit-taking, with the commodity counter declining by 0.25 per cent, the energy counter shedding 0.18 per cent, and the insurance sector losing 0.15 per cent.

At the close of trades, the All-Share Index (ASI) grew by 488.73 points to 108,849.83 points from 108,361.10 points and the market capitalisation expanded by N307 billion to N68.412 trillion from N68.105 trillion.

During the session, UPDC REIT gained 10.00 per cent to settle at N6.60, Meyer also leapt by 10.00 per cent to N8.80, Beta Glass advanced by 9.98 per cent to N146.05, The Initiates went up by 9.95 per cent to N6.08, and Vitafoam Nigeria moved up by 9.94 per cent to N55.85.

However, Deap Capital lost 10.00 per cent to quote at N1.08, Veritas Kapital depreciated by 9.09 per cent to N1.00, Linkage Assurance crashed by 6.61 per cent to N1.13, Africa Prudential dwindled by 5.60 per cent to N16.00, and UDPC retreated by 4.46 per cent to N3.00.

Business Post reports that a total of 50 equities ended on the gainers’ log yesterday and 16 equities finished on the losers’ side, representing a positve market breadth index and strong investor sentiment.

The market participants traded 587.5 million shares valued at N18.7 billion in 17,496 deals at midweek versus the 475.5 million shares worth N13.9 billion transacted in 17,575 deals on Tuesday, showing a decline of 0.45 per cent in the number of deals, and a growth in the trading volume and value by 23.55 per cent and 34.53 per cent, respectively.

The most active stock was GTCO with a turnover of 98.6 million units valued at N6.6 billion, Tantalizers traded 75.5 million units worth N175.2 million, Fidelity Bank exchanged 40.5 million units for N816.0 million, Zenith Bank transacted 38.5 million units worth N1.9 billion, and Nigerian Breweries sold 30.5 million units valued at N1.6 billion.

By Adedapo Adesanya

The oil market fell on Wednesday as investors doubted that upcoming US-China trade talks would result in a breakthrough, with Brent crude losing $1.03 or 1.66 per cent to trade at $61.12 a barrel and the US West Texas Intermediate (WTI) crude shedding $1.02 or 1.73 per cent to sell for $58.07 a barrel.

The US and China are due to meet in Switzerland, which could be the first step toward resolving a trade war disrupting the global economy.

The trade talks between the world’s two largest economies come after weeks of escalating tensions.

President Donald Trump had protested China’s unfair advantage in global trade and slammed tariffs on imports, which has led to reciprocity from the Asian country.

Now, duties on goods imports between the countries have soared well beyond 100 per cent.

Meanwhile, market analysts have said that unless the US receives major trade concessions, further de-escalation seems unlikely, with US Treasury Secretary Scott Bessent describing the talks as “the opposite of advanced.”

In other related matters, US Vice President JD Vance described talks the US and Iran as “so far, so good” adding that there was a deal to be made that would reintegrate Iran into the global economy while preventing it from getting a nuclear weapon.

Previously, the US had threatened secondary sanctions on Iran after a fourth round of talks were postponed between both countries. This could threaten production of more than 3 million barrels per day, or about 3 per cent of global output.

This deal, if reached, could see the US lift the sanctions on Iranian oil, which right now is under maximum pressure.

The US Federal Reserve held interest rates steady but said the risks of higher inflation and unemployment had risen.

This development further economic outlook as the US central bank grapples with the impact of President Trump’s tariff policies.

US crude inventories fell by 2 million barrels to 438.4 million barrels in the week, the Energy Information Administration (EIA) said.

Also, rising conflict in the Middle East between Israel and the Houthis could increase the geopolitical risk premium, making prices go up.