Int’l Breweries losses continue to pile up as sales growth slows in Q3

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International Breweries Plc on Monday reported yet another dismal result for the nine months to the end of September.

The brewing company posted a staggering N16.4bn in net loss for the periods of January through September ending, a 130% increase from last year when it incurred a net loss of N7.1bn. The firm recorded N9.6bn of its losses in the third quarter, a 124% increase from the previous year.

This is despite posting a 17% increase in sales in the nine months to N97.2bn. The growth, however, slowed down in the third quarter with a 5.5% decline in sales.

IB Plc blamed the losses on rising costs, new excise duty on alcohol and stiff competition. Administrative expenses shot-up by 60% in the nine months to N19.5bn from N12.2bn. The widening losses are linked to its growth momentum as the company expands capacity to meet customer demands.

A 46% rise in finance cost to N13.1bn also added to the company’s woes, with the costs accelerating in the third quarter by N6.1bn.

Stiff competition between beer rivals, Nigerian Breweries Plc and Guinness Nigeria Plc is also having an impact on overall sales.

The company announced in September it was seeking to raise funds through a ‘Rights Issue’ and in October, its shareholders approved an offer price of N9.00 per share as proposed by its board following an extra-ordinary general meeting. The company said that further details on the Rights Issue will be provided in due course.

International Breweries Plc is the Nigerian unit of global brewer, Anheuser-Busch InBev (AB InBev). The company produces several popular beer brands in the Nigerian market including Hero Lager, Trophy Lager, Beta Malt, Grand Malt and Budweiser amongst others.

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