Nigerian Breweries Market Cap Rises N103bn on Dividend Declaration

The market capitalisation of Nigerian Breweries Plc rose by N103.394 billion last week following the investor swoop on the shares of brewing firm as result of N20 billion final dividend proposed for 2016.

The shares rose by N13.04 per cent last week, pushing the market capitalisation to close at N1.03 trillion last Friday.

Market operators said some investors are impressed with the final dividend recommended by the company despite a decline in profit for the year.

The directors have recommended a final dividend of N20.457 billion, which translate to N2.58 per share, bringing total dividend to N28.386 billion or N3.58 per share.

Apart from the dividend, the directors have also recommended that shareholders who are not willing to take cash dividend, could receive new ordinary shares of in the company instead.

Nigerian Breweries Plc posted a decline of 25 per cent in profit after tax( PAT), reflecting the challenging operating environment. In all, the company recorded a revenue of N313.743 billion in 2016, up from N293.9 billion in 2015. Cost of sale rose from N149.73 billion to N178.218 billion. Marketing and distribution expenses also rose from N58.45 billion to N61.312 billion. While the company brought down administrative expenses, finance cost increased by 66 per cent from N8.217 billion to N13.645 billion. However, this increase was majorly driven by net foreign exchange loss of about N7.552 billion, compared to N752 million in 2015.

Following the huge forex loss, Nigerian Breweries Plc ended the year with profit before tax of N39.675 billion, down from N54.514 billion in 2015 and PAT of N28.416 billion as against N38.05 billion in 2015.

The Company Secretary/ Legal Adviser of Nigerian Breweries Plc Mr. Uaboi Agbebaku, yesterday explained in a statement that the 100 per cent dividend payout is coming at a time the results of the company were impacted by high inflation and scarcity of foreign exchange in the macro-economic environment.

According to Agbebaku, the company was able to end the year with a positive result due to its twin agenda of cost leadership and market leadership supported by innovation.

“Although the operating environment in 2017 is expected to be similar to 2016, the company remains confident that it is well positioned to adapt to the operating environment as required, and stay committed to delivering a good return on investment to shareholders,” Agbebaku said.