International Breweries narrows loss in Q3 as low FX liquidity linger
International Breweries Plc (“IB Plc”), the Ilesha-based brewer owned by Anheuser-Busch InBev (AB InBev) on Tuesday reported a net loss of –N473m in the first nine months of its financial year (Apr – Dec 2016), a much smaller loss when compared to the first quarter and half-year when it recorded an abysmal –N1.7bn and –N1.9bn loss respectively.
The brewer which makes Trophy Lager beer, Betamalt, among others had a strong third quarter, with sales growing 46% to N9.2bn, from N6.3bn a year earlier. The boost helped narrow the loss in the prior quarters to –N437m, with the brewer finishing the third quarter with N1.4bn in net profit.
Cost of sales in the nine months to December rose 45% to nearly N12bn, from N8.1bn in the prior year. In the third quarter alone, cost of sales accelerated upwards by 66% to N4.8bn, from N2.9bn.
Like other brewers and soft drinks companies, International Breweries has been hindered by poor liquidity in the foreign exchange market, which has led to a weakening of the naira, higher inflation, and thus higher input costs, skyrocketing of finance costs by 317% to N4.6bn, from N1.1bn.
Pre-tax profit in the nine months through December fell 78% to N520m, from N2.4bn, but rose 44% in the third quarter to N2bn, from N1.4bn helping narrow the loss.
International Breweries was formerly owned by SABMiller but became part of AB InBev after the $103bn plus mega deal that merged both firms closed on 10 October 2016.