Seven-Up losses grow despite sales growth
Seven-Up Bottling Company, bottlers of the famed Pepsi cola brand released its financial results on Tuesday for the nine-months ending 31 December 2016.
The soft drinks maker reported a net loss of –N4.8bn for the period (Apr – Dec 2016) and -N2.9bn alone in Q3 (Oct – Dec). In the nine-months of 2015, it recorded N2.2bn in profit.
Seven-Up attributes the loss to weak macroeconomic factors – continued naira weakness caused by poor liquidity in the foreign exchange market which had a transactional impact through higher costs. While the company’s revenue grew by 26% to N76bn in the nine-months to December, cost of sales rose 52% in the same period to N64bn, and 79% alone in the third quarter to N26bn.
The continued weakness in the naira caused the firm’s finance cost to skyrocket 24% in the nine-months and 44% in the third quarter alone to N1.3bn, from N900m.
Fast Moving Consumer Goods companies (FMCGs) in the country including soft drinks makers and brewers have been battling foreign currency unavailability, naira devaluation, and inflation which has led to higher input costs. The company raised its wholesale prices in early January to mitigate these higher costs.
Seven-Up Bottling Co is the sole bottler and marketer of PepsiCo brands in the country such as Pepsi cola, 7-Up, mirinda, Aquafina bottled water and others.