7Up Bottling Company Plc growth trajectory remained steady for the third consecutive period as third quarter (Q3) 2014 profit after tax (PAT) grew by 16.13 percent to N4.54 billion, from N3.91 billion in the same period of the preceding year. Sales rose by 8.88 percent to N59.83 billion.

The company’s record earnings growth has been unprecedented since 2013 financial year. This means that the company has been successfully marketing its products to the growing population and the rising middle class.

Analysts say that the company has been successful because of an effective cost control mechanism and an aggressive market penetration. They also point that the country’s demography is another growth driver, where 55 percent of the population falls within the age bracket of 16 and 65 years. The median age is 19.

7Up’s record breaking result is coming at a time when other consumer product companies are struggling to remain profitable under a harsh business environment.

Problems such as bad roads are raising distribution costs, high diesel cost have also weighed down many company’s cost structure and the insecurity in the North of the country has made it difficult for firms to push their goods up to the affected areas.

With that said, input costs did go up to 62.75 percent, from 60.01 percent from the same period in 2013. Cost of sales also rose by 15.33 percent to N37.14 billion.

Direct costs attributable to projects went down marginally as gross profit rose by 4.7 percent to N22.68 billion, from N21.65 billion. Gross profit margin reduced to 37.90 percent, from 39.39 percent in the previous year.

7Up is carrying a lot of debt in its capital structure as debt ratio was as high as 87.09 percent; though, slightly better than the previous year’s 91.50 debt ratio.

This means that a large share of the company’s balance sheet is supported by loans.

Additionally, finance cost shot up by 53.84 percent to N1.80 billion, from N1.17 billion in the previous year. Total borrowing also went up by 11.97 percent to N17.68 billion.

7Up’s total assets rose by 10.02 percent to N61.46 billion as against N55.86 billion in 2013.