Nigerian Breweries post 10.5% profit decline amid drop in consumer confidence, rising production cost
Nigerian Breweries Plc released its full-year financial results for 2015, showing a net profit decline of 10.5% to N38bn, from N42.5bn in 2014. However, sales revenue rose by 10.3% to N294bn, from N266bn in the previous year. The brewer saw a 43% jump in finance charges to N7.7bn, from N5.4bn in 2014.
Pretax profit also slid by 11.3% to N54.5bn, from N61.4bn in 2014.
The company reported a 16% rise in cost of sales to N151bn, from N131bn from the previous year, while distribution and other expenses increased 15% to N80bn. The company merged with Consolidated Breweries Plc, another unit of Amsterdam-based Heineken, in 2014 as it aimed to pool resources.
Brewers in the country are facing harsh macro-economic environment, the effects of lower global oil prices, which has led to lower revenue for the government to pay salaries, a weakened currency, inflationary pressures and thus, erosion in consumer confidence.