Int’l Breweries losses continue to mount despite sales growth

Trophy Lager

International Breweries Plc on Wednesday reported a net loss of N6.8bn for the first half of the year ending on 30th June 2019, further widening its losses by 141%. In the same period in 2018, the company incurred a net loss of N2.8bn.

The loss came despite a 29% increase in sales to N69bn. The company attributed the loss to higher cost of sales by 41% to N45.4bn, a net impairment charge of 179% and a surge in administrative expenses by 66.54% to N13bn.

The widening losses are linked to its growth momentum as the company expands capacity to meet customer demands. International Breweries completed the construction of a new brewery in Sagamu, Ogun State in September 2018 at an initial cost of US$250m. The global CEO of AB InBev, its parent company, while commenting at a recent media briefing in South Africa said that its capacity expansion in the new Sagamu brewery, which is being expanded in phases, is likely to raise the cost to US$400m.

“Nigeria (is) becoming a more and more important market as we grow in that market,” Brito said.

“I mean we’re growing double digits, we didn’t grow in the past as fast because we were lacking capacity and now that we have capacity, strong brands and (a) great group of people we’re challenging the status quo there”.

In its half-year results ending in June, AB InBev reported continued double-digit revenue and volume growth in its Nigerian subsidiary, driven by its core portfolio as well as Budweiser in the premium segment.

International Breweries beer brands include Budweiser, Hero Lager, Trophy lager, Beta malt, among others.

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