Nigerian Breweries Plc reported a net drop in profit of 28% for the first six months of 2019 ending on 30th June. Profits fell to N13.3bn from N18.4bn in the previous year. The drop accelerated in the second quarter with the company recording a 36% decline in earnings to N5.3bn from N8.2bn.

The decline in profit was blamed on a host of factors including the impact on sales of the second wave of a new excise tax which came into effect on 4th June 2018.

Revenue declined marginally by 1.43% to N170.1bn from N172.7bn in the same period in 2018.

Competition in the lager segment also weighed on the brewer’s earnings.

Net finance cost spiked 24.2% to N5bn adding to the brewer’s woes. The finance cost increase accelerated in the second quarter by 48%.

Commenting on the results, the company said: “Continuous focus on cost initiatives helped the company to return an operating profit of N24.5bn and a profit after tax of N13.3bn for the period.

“The operating environment remains challenging with another increase in the excise duty rate coming into effect at the beginning of June 2019. The company remains confident that it has the right long-term strategy that will continue to deliver good return on investment to its shareholders.”

Nigerian Breweries is the country’s largest brewer and a subsidiary of Dutch brewer Heineken NV.