International Breweries Net Loss Grows By 352% To N106.78bn
A huge foreign exchange loss that emanated from International Breweries Plc’s foreign currency liabilities has damaged the company’s earnings, according to the company’s unaudited financial statement.
The company’s net loss grew by more than 352% year on year to N106.78 billion at the end of the first half of 2024, up from N23.593 billion in the comparable period in 2023, details from its unaudited financial statement revealed.
International Breweries grew revenue by 92.2% year on year to N223.2 billion from N116.13 billion in the comparable period in 2023. Analysts said the significant surge was driven by price adjustments seen on beers and other ready-to-drinks by top breweries in the market. The company experienced a sharp surge in raw materials and overhead costs.
This caused a significant rise in adjusted cost of sales, up by 82.5% year on year to N144.99 billion from N79.43 billion 12 months earlier. Analysts, however, noted that despite the significant rise in the company’s cost of sales, its gross margin improved to 35% from 31.6%.
Its unaudited numbers showed that gross profit reached N78.2 billion in the first half of 2024, translating to a 113.1% increase from N36.7 billion in H1 2023. Its operating expense, adjusted for depreciation, grew by 140.7% year on year, reaching N41.5 billion from N17.24 billion in H1 2023.
The brewer’s other income from scrap sales, sundry, & royalty increased to N7.99 billion in the period, from N705 million.
This helped operating profit growth in the period. Details from the results showed that the company’s operating profit rose to N22.45 billion from N1.89 billion in H1 2023. Its finance income declined by 58.7% year on year to N2.66 billion from N6.43 billion in the same period of 2023.
Conversely, finance costs increased significantly by 153.1%, rising to N33.34 billion from N13.17 billion in the first half of 2023. CSL Stockbrokers noted that this happened despite the complete settlement of the company’s loans and borrowing balance of N473.89 billion as reported at the close of Q1 2024.
International Breweries Plc reported a substantial net foreign exchange loss of N141.98 billion for H1 2024. Of this total, 75% (N106.55 billion) was realized, while the remaining 25% (N35.45 billion) was unrealized.
In summary, the company reported a pre-tax loss of N150.24 billion compared with a loss of N41.43 billion in H1 2023. Q2 Pre-tax loss of N60.88 billion makes it the seventh consecutive loss-making quarter, CSL Stockbrokers Limited said in a review note.
Its loss after tax came to N106.78 billion in the first half, a significant surge of about 353% year on year from N23.593 billion in the comparable period in 2023.
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