Nigerian Breweries Plc has attributed a 22 per cent slide in profit to the new excise duty regime and higher tax on beer introduced by the Federal Government in June 2018, which impacted on affordability.
In the filing statement signed by the Company Secretary/Legal Adviser, Uaboi Agbebaku, the brewer said: “that the new excise duty regime and higher rate of beer introduced by the Federal Government in June 2018 further impacted on affordability in the period under review.”
Consequently, the company announced a profit after tax of N18billion in its half-year (H1) operations, representing 22 per cent decrease over the N24billion recorded in the corresponding period in 2017.
A breakdown of the brewer’s result sent to the Nigerian Stock Exchange (NSE), indicated that revenue also dipped by five per cent from N181billion in 2017 to N173billion during the period under review.
Further analysis showed that operating activities declined by 20 per cent to N32billion from N39billion year-on-year, just as profit before tax also dropped by 19 per cent from N34billion to N28billion in the same period.
Nigerian Breweries said the benefits of the price increases it took in 2016, to mitigate the effects of skyrocketing inflation and foreign currency challenges continued into its first-half results.
The company declared a 15 per cent growth in revenue for the first six months of its financial year. Sales grew to N181billion ($500million), from N157billion ($430million) from the previous year.
However, higher input costs contributed to a 28 per cent increase in overall cost and expenses, which were the result of double-digit inflation and a challenging operating environment.
The brewer notes that its continued focus on productivity efficiencies as well as one-off ‘other income’ and a lower net finance charge in the period boosted profits 24.4 per cent to N23.8billion ($65.7million), from N19billion ($52.4million) in 2016.
NB warns that the operating environment remains challenging; however, it expressed confidence in its management capacity to deliver good returns barring any unforeseen circumstances.