Nigerian Breweries Profit Slumps Amidst Opex, FX Losses
Nigerian Breweries Plc reported 27 per cent. This comes over decline in profit before tax and growth in profit after tax of 4.06 percent over a decline in tax expenses.
The decline in profit before tax dragged the profit margin to 3.1 per cent in 2022 from 5.4 per cent in 2021, while the profit after tax margin stood at 2.4 per cent in 2022 from 2.9per cent in 2021. Nigerian Breweries in its audited financial statement for full year ended December 31, 2022 reported N17.34 billion profit before tax from N23.7billion reported in 2021, while profit after tax grew by 4.06 per cent from N12.67billion in 2021 to N13.19billion in 2022.
The group thus recommended to shareholders a total dividend of N13.87 billion, that is, N1.43 kobo per ordinary share of 50 kobo each.
The total dividend consists of an interim dividend of N3.28, that is, 40 kobo per share, and a final dividend of N10.58 billion, that is, N1.03 kobo per share.
The group reported an Earning Per Share (EPS) of N1.58 in 2022 from N1.57 in 2021.
The achieved EPS was driven by the sturdy growth in revenue. As the board proposed a final dividend per share of N1.03 in 2022 from N1.20 in 2021, it implies a dividend yield of 2.5per cent based on the last closing price of N41.50 as of February 24, 2022.
The Group 2022 performance was weakened by a significant increase in total operating expenses and Net loss on foreign exchange transactions, over a challenging business environment. The breweries manufacturing company reported N337.31billion cost of sales in 2022, an increase of 21.8per cent from N276.87billion in 2021 to position its gross profit at N213.33billion in 2022, representing an increase of 33 per cent from N160.41billion reported in 2021. Gross profit margin expanded by 206basis points to 38.7per cent in 2022 from 36.7 per cent in 2021, as the strong revenue growth outweighed the increases in the cost of sales.
The higher cost in the period was influenced by the highly inflationary environment, devaluation of the naira, and high energy prices.
Total operating expenses elevated to N163.98billion in 2022, an increase of 31.6 percent from N124.6billion in 2021 with marketing-related costs accounting for 82.8per cent of the total operating expenses.
The breakdown of total operating expenses revealed a 38.1 per cent increase in selling and distribution expenses to N135.83billion in 2022 from N98.36 billion in 2021, while administrative expenses stood at N28.15billion in 2022, representing an increase of 7.3 per cent from N26.24billion reported in 2021.
The persistent increase in operating expenses mainly to the challenging operating environment in Nigeria, and the brewer’s continuous focus on increasing brand visibility.
In addition, the overall operating cost (Cost of sales, Selling and distribution expenses, among others) increased to N501.87billion in 2022 from N400.42billion in 2021.
Nigerian Breweries in 2022 spent aa whopping sum of N246.72billion on raw materials and consumables from N197.82billion in 2021.
Profit from operating activities stood at N51.76billion in 2022 from N41.49billion in 2021.
As net loss on foreign exchange transactions grew significantly to N26.34billion in 2022, an increase of 274per cent from N7.04billion in 2021, it brings net finance charges to N34.42 billion in 2022 from N billion reported in 2021.
Nigerian Breweries exposure from its foreign currency-denominated payables amid a 23.9per cent decline in finance cost.
*Continues online at www. thewillnigeria.com
Minister of Aviation, Senator Hadi Sirika has called on the World Meteorological Organisation (WMO) to intensify effort in encouraging cooperation among Members and assist in bridging the existing gap between the political class and the experts on the field. This is just as he commended the WMO Secretary General, Professor Petteri Taalas, who he said has shown tremendous support to the development of Meteorology globally, in Africa and specifically in Nigeria.
Sirika made the call during the 76th Session of the WMO Executive Council held in WMO headquarters in Geneva.
The Minister noted that one practice that has enabled Meteorological development in Nigeria is the strong synergy and support between the Political Class and the experts. Explaining further, he said "we strive to ensure we have the right leadership at the elm of affairs of the Nigerian Meteorological Agency (NiMet), and the Agency under the leadership of Mansur Matazu, has also demonstrated commitment to excellence by judicious utilisation of resources, broad stakeholders’ engagements, and resultoriented goals with clearly detailed regular reporting".
Listing some of his achievements, the Minister pointed out that NiMet has grown in size, visibility and relevance, not only in Nigeria but in the region and indeed globally during his time.
"New products have been introduced by the Agency. These include Seasonal Climate Prediction (including its Summary for Policy Makers and translated version), the State of the Climate in Nigeria, Climate and Health Bulletin, Hydrometeorological bulletin, Agrometeorological bulletin, Extreme Weather Events Bulletin, Marine meteorological bulletin, 3-days Impact based Forecast and many more on different timescales and validity".
These products and many more tailored services, he said have generated lots of interest within the nation up to the Presidency that culminated into the President Personally commissioning a national Meteorological Institute of Science and Technology in his home State and in his honour.
According to him, there is increased inter-Agency synergy along the Climate Services Value Chain, bringing together the meteorological, hydrological, disaster management and all responders together as we develop and practice Multi-hazard Early Warning System for All Nigerians. "NiMet forecasts provide basis for the Annual Flood Outlook and Disaster Preparedness in Nigeria by both Nigeria Hydrological Services Agency and National Emergency Management Agency (who are both in two separate Ministries of Governments).The Agency has provided interventions in Liberia, Sierra Leone, The Gambia, and Malawi in terms of Capacity Building. Technical Assistance, Quality Management Systems and Competency framework".
"We have successfully hosted, providing leadership, and participated in Regional Climate Outlook Forums. Nigeria was recently part of and led the Country Hydromet Diagnostic (CHD) in Liberia and Sierra Leone, we hosted a Study Visit by both National Meteorological Services of Republic of Niger and The Gambia, we provided hosting support for the WMO HydroSOS initiative and earnestly working to take the initiative to the implementation phase, and just on Tuesday, we are part of the SOFF Initiative as well.