Nigerian Breweries declares 11% decline in profit

Nigerian Breweries Plc has declared 11 per cent decline in profit after tax to N19 billion for the six months ended June 30, 2016 from N21.5 billion posted in prior six months.

The unaudited condensed interim financial statements posted on The   Nigerian Stock Exchange official website, showed that the group profit before tax also dropped by 18 per cent to N25.5 billion from N30.99 billion recorded in six months ended June 30, 2015.

Major contributors to the company plunge in profitability include eight per cent increase in cost of sales from N77 billion to N83.39 billion while finance cost significantly rose by 151.5 per cent to N8.6 billion as against N3.4 billion recorded in six months ended June 30,2015.

The company noted that interest expenses for the six months period of 2016 amounted to N1.6 billion as against N2.5 billion in six months ended June 30, 2015.

Other net finance expenses for the six months period June 30, 2016 amounted to N7 billion as against N0.9 billion expenses in six months of 2015.

The breweries manufacturing company revenue for the period increased marginal by four per cent from N151.67 billion in six months of 2015 to N157.37 billion in the current six months period

 A statement signed by the company’s Secretary/Legal Adviser, Mr. Uaboi Agbebaku, said, “The market and the operating environment during the last three months were more difficult than the First Quarter of the year.

“Nevertheless, in the first half of the year, the Company was able to deliver top line growth with Revenue increasing by four per cent compared to the first six months of 2015. Rising inflation combined with higher input costs as a result of scarcity of foreign exchange, led to a flat Operating Profit versus the prior year.

Despite a lower interest cost from the Commercial Paper programme, Profit after tax declined by 11 per cent, mainly due to foreign exchange losses which occurred in June. The operating environment is expected to remain challenging for the rest of the year.

The Company according to him remains focused on its twin agenda of Cost Leadership and Market Leadership supported by innovation, and the Board remains positive on the Nigerian market for the medium and long term.

 In addition, to the six months unaudited results, the Company acquired, plant and equipment with a cost of N6.1 billion, 56 per cent below N13.8 billion  worth of property acquired in prior six months .