Nigerian Breweries Profit After Tax Grows By 77.7% In Q1’22.


Nigerian Breweries Plc (NB) grew its Profit After Tax (PAT) by 77.7% in Q1’22. The strong performance was mainly driven by the 30.4% rise in sales to N137.8 billion and cost efficiency, which masked the impact of a higher OPEX-to-sales ratio according to a release to Nigerian Exchange Limited.

The parent company, Heineken, in its Q1’22 earnings release, attributed the Nigerian sales growth to strong pricing and premiumisation. It also noted that despite the volume drop triggered by capacity constraints, revenue from its premium drink portfolio grew by more than 30.0%, with Heineken, Tiger, and Desperados leading the way.

Management highlighted that the company raised prices twice in January to compensate for the rising cost of raw materials. The company’s sustained commitment to digital business-to-business (eB2B) platforms also supported revenue.

NB further stated that robust sales growth and a capacity to transfer cost burden to final consumers resulted in a 7.8 ppts expansion in its gross margin to 45.3% in the review quarter. Elsewhere, net finance cost came in 0.5% lower YoY at N3.0 billion, likely reflecting the combined impact of lower long-term borrowings and broad moderation in interest rates that may have masked the three-fold surge in net foreign exchange loss.

NB’s cash balance advanced by 25.0% YoY to N23.0 billion. The boost in cash position primarily reflected higher net proceeds from loans and borrowings. However, the company reported a weaker working capital position in the review quarter, with changes in trade and other payables the main drag.

The company’s annualised ROE and ROA stood at 30.4% and 10.8%, respectively (vs 7.6% and 2.7% in FY’21).

See table below:

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