NIGERIA – Nigerian Breweries Plc (NB Plc), subsidiary of Heineken International, has registered a 31% rise in half year revenue for the period ended June 2022 from N209 billion (US$502m) to N274.03billion (US$658m).
The company’s performance comes on the heels of high inflation, during which consumers and businesses both had to contend with the rising cost of products and services.
According to the unaudited report and provisional results filed with the Nigerian Exchange Limited, the brewer’s Profit After Tax for the period under review rose by 142.8%, from N7.86billion (US$18.9m) to N19.08billion (US$45.8m). Similarly, basic earnings per share in H1 2022 was 237 kobo as against 97 kobo that was recorded in H1 last year.
According to a statement signed by the company secretary/Legal Director, Uaboi Agbebaku, the company’s increase in profit was driven mainly by top line growth resulting from its pricing strategy and better mix.
Further analysis of the results revealed that the Cost of Sales increased by 18.3%, from N131.34 billion (US$315m) in H1, 2021 to N155.35 billion (US$373m) in 2022 in the same corresponding period.
Marketing, Distribution, and Administrative expenses also rose by 44.6%, from N58.42 billion (US$140m) in H1, 2021 to N84.45 billion (US$203m) in H1, 2022, driven by the increase in commercial activities post-COVID, rising diesel prices and higher wages arising from collective labour agreements.
Uaboi also noted that although interest expenses were lower, the net finance cost was higher due to foreign exchange losses arising from a higher cost of meeting foreign obligations to overseas partners.
“Despite these challenges, our business continues to build momentum and deliver consistent profitable growth even in the context of a very challenging operating environment.
“Our best-in-class portfolio of brands provides a unique platform that positions us well to lead and grow the beer and malt category and drive superior long-term value creation,” the statement added.
During the period under review, the maker of Star Lager, heightened its focus on driving sustainability by signing a power purchase agreement with Konexa, an integrated energy development and investment platform to deliver 100 per cent renewable energy that will fully cover the electricity needs of its two breweries in Kaduna state.
Under the terms of the ten-year agreement, Nigerian Breweries Plc has outsourced the power supply for its critical loads for its breweries, converting from fossil fuels into a full-service renewable energy solution, using hydropower sources.