At the Nigerian Stock Exchange (NSE) last week, the Board of Directors of Nigerian Breweries Plc released the company’s audited results for the Full Year ended December 31, 2015.
Listed on the consumer goods sector (Beverages-Brewers/Distillers subsector), Nigerian Breweries reported 10.3percent increase in revenue of N293 billion as against N266 billion revenue it reported in 2014.
Also, the Full Year 2015 results show that results from operating activities declined by 6.9 percent to N62 billion in 2015, from N66 billion in 2014.
Profit before Tax (PBT) dropped by 11.3 percent, from N61 billion at the end of the 2014 financial year to N54 billion in the same period of 2015 while Profit after Tax (PAT) dipped by 10.5 percent to N38 billion in 2015, from N42 billion posted in 2014.
No doubt, the largely capitalised company’s bottom-line figures may have surprised some market analysts, but truth is that shrinking household wallets are reflecting on firms earnings.
Nigerian Breweries plc margins were weighed by reduced consumer purchasing power and increased cost of doing business in Nigerian mainly due to rising inflation and FX pressures.
Amid these challenges, the board of Nigerian Breweries plc showed commitment to always reward shareholders as they would enjoy a total dividend of N4.80 per ordinary share of fifty kobo each for the 2015 financial year.
If approved by shareholders at the upcoming Annual General Meeting, the amount would be the highest dividend ever paid by the company in its 70 year history. Nigerian Breweries had earlier paid an interim dividend of N9.5 billion, that is, N1.20. Thus, the final dividend will be N28. 5billion that is, N3.60 per share (three naira sixty kobo).
The proposed final dividend will be payable on the May 12, 2016 to all shareholders whose names appear on the Company’s Register of Members at the close of business on March 2, 2016.
“All through 2015, the operating environment remained a challenging one. The year witnessed reduced consumer purchasing power and increased cost of doing business mainly due to inflation and devaluation. Notwithstanding, our twin agenda of cost leadership and market leadership supported by innovation helped us to maintain strong results and deliver good return-on-investment (RoI) to our shareholders. During the year, the Company successfully concluded the integration of two operating companies following the merger with the dissolved Consolidated Breweries Plc”, Nigerian Breweries plc said in the result at the NSE signed by Uaboi Agbebaku, Company Secretary/Legal Adviser.
For Nigerian Breweries plc, it is set to take advantage of any upswing in the market this year. “2016 is a continuation of the tough operating environment of 2015. Nevertheless and barring any unforeseen circumstance, the Board remains confident that with our strong portfolio of leading brands together with our Cost Leadership agenda, the Company should be able to weather the current storm and take advantage of any upswing in the market”, it said.
As at 31st December, 2014 Nigerian Breweries had a market capitalisation of approximately N1.3 trillion, which made it the second largest company in Nigeria by market capitalisation. As at last Tuesday, the company’s market capitalisation at N770.708billion showed that Nigerian Breweries shares were not spared in recent spate of sell-off that bedeviled Nigerian equities. Nigerian stock market has lost in excess of N1trillion since this year.
The share price of Nigerian Breweries opened Tuesday at N97.2kobo, having recorded a 52-week high of N184.99 and 52-week low of N88. The company’s shares outstanding are 7.929billion units. Efemena Esalomi team of equity research analysts at Vetiva Capital Management Limited who placed a “BUY” rating on Nigerian Breweries shares have also set a target price of N139.54 for Nigerian Breweries shares.
The shares of Nigerian Breweries Plc were admitted to trading on the floor of the Nigerian Stock Exchange on September 5, 1973. Currently, Nigerian Breweries Plc is the second most capitalised company on the Nigerian Stock Exchange. Nigerian Breweries plc is proudly Nigeria’s pioneer and largest Brewing firm.
The company was incorporated in 1946 and in June 1949, it recorded a landmark when the first bottle of STAR lager beer rolled off our Lagos Brewery bottling lines. This first brewery in Lagos has undergone several optimisation processes and as at today boasts of one of the most modern brew house in the country.
In 1957, Nigerian Breweries commissioned its second brewery in Aba. The Aba Brewery has also recently undergone several optimisation processes and has been fitted with best in brewery technology. In 1963 Nigerian Breweries commissioned its Kaduna Brewery while Ibadan Brewery came on stream in 1982. In 1993, the company acquired its fifth brewery in Enugu. A sixth brewery, sited at Ama-eke in 9th Mile, Enugu was commissioned and christened Ama Brewery in October 2003. Ama Brewery is today the biggest and most modern brewery in Nigeria.
Operations in the Old Enugu Brewery were however discontinued in 2004. Nigerian Breweries acquired a malting Plant in Aba in 2008.
In October 2011, Nigerian Breweries bought majority equity interests in Sona Systems Associates Business Management Limited, (Sona Systems) and Life Breweries company Limited from Heineken N.V. This followed Heineken’s acquisition of controlling interests in five breweries in Nigeria from Sona Group in January 2011. Sona Systems’ two breweries in Ota and Kaduna, and Life Breweries in Onitsha have now become part of Nigerian Breweries Plc, together with the three brands: Goldberg lager, Malta Gold and Life Continental lager.
In 2014, Nigerian Breweries got approval from the Securities and Exchange Commission and the respective shareholders of both Nigerian Breweries Plc and Consolidated Breweries Plc to merge the operations of both companies. The merger became final on December 31, 2014.
Following the successful merger, Nigerian Breweries now has three additional breweries in Ijebu-Ode, Ogun State, Awo-Omamma in Imo State and Makurdi in Benue State. The merger also brought an additional seven brands into NB plc portfolio. Thus, from that humble beginning in 1946, Nigerian Breweries plc has now grown into a Brewing Company with 11 breweries, 2 malting plants and 26 Sales depots from which its high quality products are distributed to all parts of Nigeria.
Nigerian Breweries Plc has a growing export business which covers global sales and marketing of its brands and dates back to 1986. NB Plc offers sales, logistics and marketing support to make its brands shelf-ready in international markets, including world-class outlets such as TESCO and ASDA Stores in the United Kingdom. Its brands are available in over thirteen countries, across the United Kingdom, South Africa, Middle-East, West Africa and the United States of America.
According to the 2015 corporate rating report by credit rating and risk managing company Agusto & Co, Nigerian Breweries plc possesses very strong financial condition and very strong capacity to meet local currency obligations as and when they fall due. The rating is also supported by Nigerian Breweries strong financial condition which is validated by good profitability, low leverage, good cash flow and adequate working capital.
In December 2014, Nigerian Breweries plc completed a merger with Consolidated Breweries Plc which formed an enlarged entity that retained the name Nigerian Breweries plc.
The new Nigerian Breweries Plc has 11 breweries strategically spread across the nation, two malting plants and 19 brands.
Iheanyi Nwachukwu
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