April 11, (THEWILL) – Nigerian Breweries Plc has created a share-for-cash dividend scheme aimed to enable investors to reinvest in the company and buy new shares with their dividends, amid prevailing dollar shortage in Nigeria’s foreign exchange market.
This was disclosed at the company’s pre-AGM briefing held in Lagos Thursday.
The foremost brewer has also recommended a total dividend of N12.9 billion, culminating in N1.60 per share due to every shareholder of the company for the 2021 financial year. This comprises the 40 kobo interim dividend already paid to shareholders and the 120 kobo final dividend proposed by the Board.
The company said that under the share-for-cash arrangement, both local and foreign investors would have the opportunity to either receive cash or buy new shares with their dividends, while those that opt for the new shares are expected to complete a share-for-cash dividend election scheme form before April 12, 2022.
The Company Secretary/Legal Director, Uaboi Agbebaku, disclosed that this is the third year the company would operate the share-for-cash arrangement and that it has witnessed remarkable improvement.
He added that people are beginning to appreciate the benefit of the arrangement, “and so we expect that this year, there would be a higher uptake in terms of the number of investors that will opt for the scheme.”
Earlier, the Chief Executive Officer, Hans Essaadi decried the high cost of living and increased price in cost of fuel, particularly diesel which is currently slowing the growth of the fast-moving consumer goods (FMCG) sector.
However, he assured that Nigerian Breweries was poised to maintain its leadership position in the industry, despite the prevailing foreign exchange (FX) challenges and the Russia-Ukraine crisis, which has resulted in a steep rise in the price of crude oil and grains, noting that the company had also remained dynamic and resilient in the past 75 years amid various challenges.
“The deteriorating forex situation has led to foreign suppliers running out of patience with their Nigerian partners, mostly manufacturers who are finding it difficult to settle their rising foreign payables.
“Our outstanding foreign payables rose by 76 per cent in 2021 and due to lack of FX, the task of procuring input materials has been arduous and this hampered the completion of our capacity extension plan.
“With the re-introduction of excise duty on non-alcoholic beverages and increase in excise duty rate for alcoholic beverages, these additional costs will lead to an increase in the price of the finished product.
“Volatility in the brewery sector is expected but we feel confident in our ability to grow and we have our pricing strategy as well as the cost and value agenda to maintain leadership in the market as well as sustain shareholders’ value and meet consumer demands in 2022”, Essaadi said.
Also speaking, the company’s Supply Chain Director, Martin Kochl, said while the company recognises the importance of sustainable local sourcing of its agricultural raw materials and commercialisation of local raw materials, it is making conscious efforts to partner with local and international research institutes to improve the performance and adaptability of registered sorghum varieties
“We expect the tonnage to increase again and we are working with a whole number of partners, research institutes to increase local sourcing and introduce higher yield sorghum varieties in the market and we are exploring other alternatives. We are expanding into growing sorghum in other areas as well and yes the supplies of sorghum have been okay but the cost of getting it has been rising”, he said.
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