FX woes push International Breweries to first quarter loss

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International Breweries Plc on Thursday reported a net loss of N1.7bn for the first quarter of 2016/2017 fiscal year, a drop from last year when the brewer recorded N421m in profit.

The brewer of Trophy Lager, Castle Lager, Beta Malt among others said that effects of currency headwinds led to the loss. Like many fast moving consumer goods companies (FMCG), International Breweries had outstanding dollar denominated loans which had to be reevaluated when the Central Bank of Nigeria moved to a floating exchange rate system in June, causing the value of the loan to balloon.

Despite the currency volatility, International Breweries saw revenue grow by 32% to N6.9bn, up from N5.2bn in the preceding year. Cost of sales rose 27% to N3.5bn, from N2.5bn due to higher cost of raw material inputs caused by the naira devaluation.

International Breweries is a SABMiller company, which is in the midst of being acquired by Anheuser-Busch InBev. The transaction is expected to close on October 10.

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