Nigerian Breweries Plc announced a considerable N153 billion foreign exchange loss, attributing it to the devaluation of the naira.
Included in its audited results for the year concluding in December 2023, Nigerian Breweries Plc provided this information within its earnings report, as submitted to the Nigerian Exchange Limited.
As outlined in its half-year interim report for the period concluding in June 2023, NB Plc registered an exchange rate loss amounting to N70.6 billion for the quarter ending June 30th, 2023.
Throughout the analyzed period, the company’s revenue surged by an impressive 8.9 percent, reaching N599.64bn from N550.64bn. However, a substantial 449.7 percent increase in net finance expenses to N189.19bn resulted in the brewer incurring a hefty loss of N106.31bn, in stark contrast to the N13.19bn gain recorded at the end of 2022.
In comments accompanying the financial results, the NB Board of Directors said, “The Nigeria business landscape experienced significant shifts in 2023 with substantial impact on businesses and livelihoods nationwide. The redesign of the naira notes which resulted in cash shortage that severely hampered social and economic activities nationwide set the tone for a turbulent year.
‘High double-digit inflation rates (with food inflation at more than 30%), removal of subsidy on premium motor spirit (fuel), devaluation of the naira, and foreign exchange scarcity further exacerbated the already difficult environment for the populace and businesses.’
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‘Notwithstanding, the Company was able to grow its revenue by 9 per cent compared to the previous year aided by a positive price mix. However, the operating profit fell by 15 per cent due to higher input cost and one-off reorganisation costs despite strong and aggressive cost savings and other efficiency measures. Coupled with the impact of the devaluation of the naira which resulted in a foreign exchange loss of N153bn, the Company recorded a net loss of N106 billion during the year.’
The board went on to state its preparedness to tap into its decades of experience of operating in Nigeria to weather the current macroeconomic headwinds.
‘In a difficult operating environment, the Board will ensure that the Company builds on its more than 77 years experience of operating in Nigeria to cope with current realities. The Company will continue to be resilient and forward-thinking leveraging our broad portfolio, strong supply chain footprint and passionate workforce to drive long-term value creation for its shareholders and other stakeholders,’ the board said.
NB opted to revise its product prices upwards in August, attributing the move to the ongoing escalation in input expenses.
An internal memo leaked to its customers unveils the company’s intention to implement another round of price hikes starting Monday, although the memo does not specify which products will be affected.
Among NB’s alcoholic offerings are popular brands like Star Lager, Gulder, Legend Extra Stout, Heineken, Goldberg, Life, and Star Radler.
The Naira was devalued in June 2023 as a result of the Central Bank of Nigeria’s consolidation of the foreign currency market segments.
The fallout was evident as companies recorded forex losses, while the banking sector celebrated FX revaluation gains, highlighting divergent outcomes.