Nigerian Breweries Plc reported 27 per cent. This comes over decline in profit before tax and growth in profit after tax of 4.06 percent over a decline in tax expenses.
The decline in profit before tax dragged the profit margin to 3.1 per cent in 2022 from 5.4 per cent in 2021, while the profit after tax margin stood at 2.4 per cent in 2022 from 2.9per cent in 2021.
Nigerian Breweries in its audited financial statement for full year ended December 31, 2022 reported N17.34 billion profit before tax from N23.7billion reported in 2021, while profit after tax grew by 4.06 per cent from N12.67billion in 2021 to N13.19billion in 2022.
The group thus recommended to shareholders a total dividend of N13.87 billion, that is, N1.43 kobo per ordinary share of 50 kobo each.
The total dividend consists of an interim dividend of N3.28, that is, 40 kobo per share, and a final dividend of N10.58 billion, that is, N1.03 kobo per share.
The group reported an Earning Per Share (EPS) of N1.58 in 2022 from N1.57 in 2021.
The achieved EPS was driven by the sturdy growth in revenue. As the board proposed a final dividend per share of N1.03 in 2022 from N1.20 in 2021, it implies a dividend yield of 2.5per cent based on the last closing price of N41.50 as of February 24, 2022.
The Group 2022 performance was weakened by a significant increase in total operating expenses and Net loss on foreign exchange transactions, over a challenging business environment.
The breweries manufacturing company reported N337.31billion cost of sales in 2022, an increase of 21.8per cent from N276.87billion in 2021 to position its gross profit at N213.33billion in 2022, representing an increase of 33 per cent from N160.41billion reported in 2021.
Gross profit margin expanded by 206basis points to 38.7per cent in 2022 from 36.7 per cent in 2021, as the strong revenue growth outweighed the increases in the cost of sales.
The higher cost in the period was influenced by the highly inflationary environment, devaluation of the naira, and high energy prices.
Total operating expenses elevated to N163.98billion in 2022, an increase of 31.6 percent from N124.6billion in 2021 with marketing-related costs accounting for 82.8per cent of the total operating expenses.
The breakdown of total operating expenses revealed a 38.1 per cent increase in selling and distribution expenses to N135.83billion in 2022 from N98.36 billion in 2021, while administrative expenses stood at N28.15billion in 2022, representing an increase of 7.3 per cent from N26.24billion reported in 2021.
The persistent increase in operating expenses mainly to the challenging operating environment in Nigeria, and the brewer’s continuous focus on increasing brand visibility.
In addition, the overall operating cost (Cost of sales, Selling and distribution expenses, among others) increased to N501.87billion in 2022 from N400.42billion in 2021.
Nigerian Breweries in 2022 spent aa whopping sum of N246.72billion on raw materials and consumables from N197.82billion in 2021.
Profit from operating activities stood at N51.76billion in 2022 from N41.49billion in 2021.
As net loss on foreign exchange transactions grew significantly to N26.34billion in 2022, an increase of 274per cent from N7.04billion in 2021, it brings net finance charges to N34.42 billion in 2022 from N billion reported in 2021.
Nigerian Breweries exposure from its foreign currency-denominated payables amid a 23.9per cent decline in finance cost.
From the profit & loss figures, the multinational breweries reported N550.64billion revenue in 2022, representing an increase of 25.9per cent from N437.3billon in 2021
Nigerian Breweries growth in revenue was primarily driven by strong pricing to mitigate inflation and brand mix improvements.
The performance was also supported by a strong performance of the premium portfolio, led by Tiger and Desperados, and the continued momentum of Heineken, while the low and non-alcoholic portfolios remained broadly stable.
According to the management, the total volume in the period weakened, reflective of the pressure on consumer disposable income amid supply chain challenges.
The Company Secretary, Nigerian Breweries, Uaboi Agbebaku, in a statement said the growth in revenue was driven by brand mix improvements and strong pricing.
According to him, “The total market decreased by high single-digit reflecting pressure on consumer disposable income as well as naira devaluation and inflation. Nevertheless, we outperformed the market led by our strong premium portfolio.
“Cost of Sales, Marketing, and Distribution expenses were under pressure due mainly to inflation, devaluation of the naira and high energy prices.
“While the operating margin was flat, our Profit after tax margin was reduced driven mainly by the increase in foreign exchange losses due to the naira devaluation and foreign currency scarcity.”
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
