Nigerian Breweries Plc posted a net loss of N106 billion for the year ended December 31, 2023, largely induced by the impact of the devaluation of the naira on its foreign exchange transactions.
The company’s audited results released to the Nigerian Exchange Limited (NGX), indicated that revenue rose by nine per cent versus the prior period of 2022. The company also reported an operating profit of N44.5 billion in 2023. However, this was lower by 15 per cent compared to the corresponding period in the previous year, citing an increase in input cost, a one-off reorganisation cost, and other economic pressures as causes of the decline.
Speaking on the performance, the managing director/CEO, Nigerian Breweries, Mr. Hans Essaadi said, the business performance of 2023 reflects the challenging economic environment in Nigeria.
According to him, these severe economic conditions include persistent cash scarcity, removal of fuel subsidies resulting in a notable surge in energy cost, naira devaluation, foreign exchange scarcity, and continued challenged consumer spending in the midst of high inflation.
“Despite these challenges, the business recorded some progress, delivering a nine per cent growth in revenue aided by a positive price mix. Unfortunately, our efforts were undermined by the impact of the devaluation of the naira, causing an N153 billion loss on foreign exchange transactions,” he pointed out.
Nigerian Breweries revealed that its reaction to the challenges presented by the tough economic terrain was centred around reducing risk to the business by focusing on a positive price mix, efficient sales operations, strong and aggressive cost management, and other efficiency measures.
“Going into the new year, we are conscious of the continued severe macroeconomic challenges – rising inflation, heightening operating costs and pressured consumer income spend. However, we believe the challenges of 2023 have laid the groundwork for opportunities that would lead to value creation for all our stakeholders,” Essaadi said.
He noted that, “one of these opportunities is the acquisition of an 80 per cent business stake in Distell Wines and Spirits Limited, a local business in the wines and spirits category, and an exclusive right to import all Heineken Beverages wines, spirits, and ciders brands from South Africa, including a licence to market and distribute all the products in Nigeria, as well as to produce any of the imported brands locally.
“This acquisition is part of efforts to provide access to a complementary multi-category portfolio of fast-growing wines and spirits brands and capture significant growth opportunities in the wines and spirits segment of the beverages industry.”
He added that, “the company will continue to be resilient and forward-thinking leveraging our broad portfolio, strong supply chain footprint and passionate workforce driving long-term value creation for its shareholders and other stakeholders.”
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