Nigerian Breweries Plc, on Wednesday reported a net profit decline of 21.3% for the first quarter of 2019, impacted by the new excise duty rate increase that came into effect in June. Net earnings fell to N8bn from N10.2bn earned in the same period in 2018.

Excise duty rate increased by 48.2% from the same period in the previous year thus shaving-off N8.1bn from sales revenue as compared to N5.5bn. Total Net Revenue grew by 3.3% to N82.3bn from N82.9bn in 2018.

Commenting on the results, Nigerian Breweries said: “The increase in Net Revenue was offset by higher excise duty following the excise duty regime introduced in 2018.”

“Cost of Sales increased by 7.3% primarily driven by raw materials and consumables while Marketing and Distribution expenses increased 7.9% over the same period in 2018. Administrative Expenses reduced by 12%, partially driven by the right sizing exercise undertaken by the Company in Q3, 2018.

The company also faced stiff competition from its rivals, Guinness Nigeria Plc and AB InBev owned International Breweries Plc.

However, the brewer said that the impact of inflation and currency devaluation was minimized by the continued focus on cost efficiencies delivered through Cost Leadership initiatives.

Looking forward to the rest of the year, the company said that 2019 operating environment so far, has shown similarities with the difficult environment witnessed in 2018. However, the company’s Board remains confident that it has a clear strategy to deliver good return on investment.