Record FX loss, inflation push down Nigerian Breweries profit for the year
Nigerian Breweries Plc, said on Monday that profit for its 2016 full financial year fell 25%, reflecting a tough macroeconomic environment in the country.
The maker of Star Lager and Gulder said that despite sales growth of 6.7%, a combined effect of rising inflation and the devaluation of the naira reduced the company’s net income by 25%. It noted that revenue grew to N341bn in 2016, up from N294bn in the preceding year.
But a record 66% increase in net finance cost to N13.6bn, from N8bn, largely driven by net foreign exchange loss of N7.6bn, from N752m in 2015 caused profit to drop to N28bn. In 2015, net profit was N38bn.
While commenting on the company’s results, Nigerian Breweries Company Secretary/Legal Adviser Mr. Uaboi Agbebaku said that the said results were impacted by high inflation and scarcity of foreign exchange in the macro-economic environment.
However, he added that the company was able to end the year with a positive result due to its twin agenda of Cost Leadership and Market Leadership supported by Innovation. The statement acknowledged that although the operating environment in 2017 is expected to be similar to 2016, the Company is confident that it is well positioned to adapt to the operating environment as required, and stay committed to delivering a good return on investment to shareholders.