Nigerian Breweries Recommends N19.40bn Dividend Pay-out

cushion for pricing that means we are 15 per cent over the price. That means that at the end of the day, instead of 2.3 million and we end up with 2.1 million, we would be 10 per cent down on volume. If we are 10 per cent down on volume and 15 per cent on price, we would still meet our projections.

What is your reaction to the deliberate decision by the NASS to increase deficit financing and the inclusion of some items into the budget every year?

Let me begin with the adjustment as the National Assembly was said to have made. As we speak, we have not received the details of what they passed. And on the usually process, when they pass the budget, they communicate details to the President who pass them on to us, and we match what they have passed to what was sent and then try to understand the rational for the changes and what needs to be done to implement them and if it is implementable. And until then, I am afraid I may not be able to comment on that. If we go by the media, we have heard too much news out there. From saying the National Assembly increased the budget by N10 billion and all kind of numbers. If you go by the new number, the difference is about N90 billion. But we don’t know if N90 billion is a net net number. It may well be that the adjustments are much more than that. Some things may have been taken out; some things may have been added and N90 billion is just a net number. But until we get that details, I am not able to comment.

Then on the other part of your question which people often describe as repetitive and frivolous items, on one hand, you talk about the fact that the budget doesn’t perform up to 100 per cent, and the other hand you talked about repetitive provisions. The reality is that some of those items that you find repeating themselves, sometimes because they are considered low priority items, they are the last to get funding. And so, because the budget doesn’t perform up to 100 per cent, we don’t get to them. So, all that happens is that the agencies are asked to move them to the following year. Then in the following year, if we are able to get to them, we realise them, but if not, we further move them forward. That is one explanation. The other explanation is because resources are constrained, if an agency has a need for 200 computers, we then would say to them that ‘sorry, we might not be able to fund 200 computers in one year, we will be able to fund only 50 computers in a year.’ What that means is that in year one, you will see 50 computers in the budget of that agency, in year two you would see 50 computers in the budget of that agency again, then same as year there and year four. That is not repetitive, but 200 computers bought over four years. So before you make conclusion of whether an item is frivolous or repetitive, ask us through the citizens’ portal on our website, we will give you answers rather than rush to conclusion when you may not have all the facts. And it baffles me when people talk about entertainment, all of the provisions for what you call entertainment. The entire provisions in the budget for overheads of government in the 2018 budget for instance was N246 billion, which was less than three per cent of the total budget. So people talk about cost of government; if you made overheads zero, it doesn’t amount to significant savings.

Why is FG shying away from subsidy removal just as the new minimum wage has been approved. What are some of the recommendations you came up with so that we do not borrow more to fund this budget?

The government would make the recommendations public when it deems it necessary to do so and there is a process that is currently on-going. It would be difficult for me to comment even though I was a member and secretary of that committee. Broadly speaking, the recommendations about initiatives for raising revenue and for cutting cost where feasible. I can assure you that there is not much in those recommendations that is totally novel. On the removal of subsidy, again this is a matter that is under consideration. Right now, we had a situation where the current administering has made some adjustment in petroleum pricing on PMS and because all other products have been deregulated. It is only about petrol with N145 on the price. Given the current dynamics of the oil market, the landing cost of PMS is more than the price ceiling and so what has happened is that the private traders of petroleum products have moved away from the market. But NNPC, given its commitment to ensure availability of petroleum products in the country now finds itself as the only one in that business of importing and distribution and in that process, is incurring losses. So the under recovery of the trading in PMS washes off on the over- recovery of profits in some other lines of their business and that is the way it is happening. Whatever decision we make on recovery is only interim. The goal of the administration is to increase domestic refining capacity. When we have sufficient capacity, some of the cost elements that contribute to what we call subsidy would disappear and so if the products where refined domestically, we would expect cost like transportation, financing cost for period of ordering to delivery and even the infrastructure cost that is required to manage and handle importation, insurance and more. Whatever happens to subsidy is only interim measure.

Many Nigerians have raised concerns about extra budgetary spending, is there a justification for it especially on the Tradermoni not being appropriated for which the opposition recently described as a vote buying tool?

Anyone that says Tradermoni is extra budgetary probably hasn’t read the budget and doesn’t understand it. There is a N500 billion provision in the budget and it has been there in the last three years, every year, for what we call the social investment program of the government and Tradermoni is only a small component of that.

Tradermoni is provided for in the budget. But what has happened in terms of delivery and mechanism for delivery was that instead of set up another agency or another structure of government, government decided to utilise the Bank of Industry, which already had an arm of it focused on MSMEs. One of the programs under the social investment is the Government Empowerment Program (GEP). Tradermoni and Marketmoni are simply just an element of that and a small one at that. So there is nothing extra budgetary about that.

The Managing Director/ Chief Executive, Baobab Microfinance Bank, Mr. Kazeem Olanrewaju, has said it plan to disburse about N30 billion to small and medium scale (SMEs) customers by the end of the year

He added about N5 billion had been disbursed this year.

Speaking at a customers’ forum in Abuja, he said, “We still have about N25 billion to go and it is part of the reasons we are here today to talk to our clients to let them know that there are a lot of things available for them to be able to take home.”

He said the bank has a lot of focus on creating risk assets for customers, stressing that over 120,000 lives had been touched with over N30 billion disbursed within the past 10 years.

Nigerian Breweries Plc has recommended total dividend of N19.401 billion for the 2018 financial year.

This amounted to dividend of N2.43 per ordinary share of 50 kobo each.

The company attributed the 100 per cent dividend payout as a demonstration of its strong balance sheet and robust cash flow.

Managing Director of the Company, Mr. Jordi Borrut Bel, disclosed this at its Pre-AGM press briefing in Lagos recently.

Bel said the company had earlier paid an interim dividend of N4.8 billion in October 2018, which amounted to 60 kobo per share. The final dividend would therefore be N14.6 billion, which comes to N1.83 per share.

An analysis of the company’s results showed that it recorded a net revenue of N324.38 billion for the 2018 financial year as against N344.53 billion recorded in 2017.

Bel explained that the marketing and distribution expenses for the 2018 financial year increased by 4.8 per cent relative to the cost incurred in 2017, and administrative expenses also experienced a 4.4 per cent declined from N21.75 billion to N20.78 billion, which was largely informed by elimination of bad costs.

He also disclosed that though the excise duty tariff imposed by federal government at 43 per cent increase took serious toll on the business, it was difficult for the company to pass the cost to consumers in view of weak purchasing power.

A further analysis of the company’s audited results showed that profit after tax increased sharply from N14.79 billion, to 19.43billion between the third quarter and the fourth quarter of the 2018 financial year respectively.

Borrut Bel stated that despite the double digit inflation and other operating challenges which affected the company’s performance, the impact was reduced by costsaving measures deployed through cost leadership initiatives.