Nigerian Breweries Plc reported an incurred a net loss of N160.5bn on foreign exchange transactions in its Q3-2024 report, compared to N86.8bn in the same period in Q3-2023.
Rising inflation, exchange rate volatility, and accelerating input costs contributed to the country’s low performance.
“The increase in Net Loss was again significantly influenced by FX loss due to the devaluation of the Naira and high borrowing costs arising from higher interest rates,” the company said in a separate statement.
The company’s net revenue was up by 76.9 percent to N710.9bn, and its cost of sales doubled to N500.1bn. Forty percent of its input costs come from imports, making it particularly vulnerable to exchange rate volatility.
Selling and distribution expenses rose to N143.1bn from N101.6bn in 2023, with distribution costs rising by 63.2 percent.
The weakening naira fell by 31 percent in January, and the beverage manufacturer incurred N160.5bn in net loss on foreign exchange transactions compared to N86.8bn a year earlier.
Pre-tax loss expanded 159.7 percent to N203bn, while after-tax loss hit N149.5bn from N57.2bn.
Nigerian Breweries’ parent company, Netherlands-based Heineken NV, was looking to take its allotment from its just-concluded rights issue fully.
The proceeds of the share offering, which targeted N600 billion in fresh capital injection, would help clear the foreign currency that threw shareholders’ funds into an unfavorable position at half-year after liabilities outpaced assets.
“The rights issue will allow the company to strengthen its balance sheet and significantly reduce FX exposure. This is seen as a business recovery plan aimed at accelerating a reinstatement of the company’s profitability,” the brewer said.
The company’s financial position considerably deteriorated in the quarter ending September 2024, with shareholders’ funds surging more than fourfold to N84.5bn from N19.5bn three months earlier.
Nigerian Breweries’ shares have depreciated by more than 22 percent this year, underperforming the Nigerian Exchange’s Consumer Goods Index, which has returned more than 40 percent.