Nigerian Breweries (NB), makers of popular drinks like Star Larger Beer and Maltina have seen a slowdown in sales in the first half of the year as Nigerians struggle with increased cost of living.
The company’s financial results for the period ended June 2016 submitted to the Nigerian Stock Exchange (NSE) on 13 July shows it made sales of N157 billion over the last six months ended June 2016. This was just 3.75% better than sales of N152 billion made in the comparable six month period ended June 2015.
Nigerians are currently grappling with a sharp rise in prices of goods and services, especially foodstuff, which may be putting pressure on what they have to spend on drinks. Inflation rate currently stands at 15.6% and is expected to keep rising. The rising prices of goods and services have put pressure on the sales and profits of companies operating in the country, including Nigeria Breweries Plc.
Gross profit for Nigerian Breweries at N73.9 billion was almost unchanged when compared to what the company earned in the same period of 2015. Operating income was also almost unchanged at N33 billion but profit after tax was slightly down by 9.5% to N19 billion as at June 2016 from N21 billion.
The management of Nigerian Breweries was also able to keep marketing, distribution and operating expenses unchanged over the period but finance costs almost doubled over the period to N8.4 billion. The sharp increase in finance costs is attributable to the exchange loss incurred as a result of the recent devaluation of the naira against the US$.
Earnings per share stood at 240 kobo but the company did not indicate if it will be paying any interim cash dividend to shareholders. The company’s share price closed today (13 July, 2016) at N133.05, down 0.53% on the day’s trading. NB’s share price is down 2.2% since the beginning of the year.
