**N167 to N50 in Two Years
By Dipo Olowookere
One may not be wrong to say shareholders of Nigerian Breweries Plc are not satisfied with the performance of the company on the floor of the Nigerian Stock Exchange (NSE) in recent times.
This is because the rate at wish the value of the company’s stocks at the market is nose-diving is alarming and it calls for worry and an urgent action to turn things around.
Even the general performance of the company has not been very impressive going by the financial statements of the brewery giant in the past quarters.
Business Post reports that yesterday, shares of the leading beer maker in the country closed at the stock market at N50 per unit after going down by N5 or 9.09 percent.
An analysis done by Business Post showed that year-on-year, the company’s stocks have lost 52 percent. To put it in simple words, shares of Nigerian Breweries, which traded at N105 each on July 31, 2018, are not worth N50 per unit.
It further means that 1,000 units of Nigerian Breweries stock worth N105,000 a year ago were now worth N50,000 at the close of business on Wednesday (yesterday).
Two years ago, the same number of shares of the company were valued at N167,000 because as at July 31, 2017, the stocks were exchanged at the market at N167 each. This means the shares have depreciated by 70 percent in two years.
The next question would be what has been the cause of this massive decline in the equities of Nigerian Breweries at the NSE?
One simple answer may be that investors are not impressed with the results being churned out by the company in recent times and are probably losing confidence in the ability of the present management to turn things around.
However, it must be stressed that since Nigeria slipped into recession in 2016, many companies have found it difficult to replicate the pre-recession performances.
Nigerian Breweries has had to struggle with competition in the beer market and consumers are getting cheaper substitute to products of the company. This is because the purchasing power of beer consumers has not been the same since 2016.
Also, the new excise duty introduced by the federal government on alcohol products in 2018 has affected the performance of Nigerian Breweries.
From what Business Post gathered, the management and board of Nigerian Breweries are making frantic efforts to make sure things get better and get the company’s shares stronger again at the stock market.
How long would this take is a question that may not be answered easily.
Aduragbemi Omiyale