FY’16 Earnings Update: Nigerian Breweries Plc

– From research@capitalbancorpng.com –

Nigerian Breweries Plc has shown resilience in the face of significant headwinds which continue to threaten the profitability of the company’s operations. In its recently released FY’17 scorecard, the company reported a 6.75% rise in revenue to ₦313.74 bn (vs. ₦293.90 bn for FY’15).

In our view we remain impressed with the company’s ability to drive sales especially with the price increase on all its product offerings.

However, the continuous rise in input costs which has constantly grown from the first quarter of 2016 into the full year result have continued to drive operating profit lower as the company reported a 19.02% growth in cost of sale to ₦178.21 bn (vs. ₦149.73 bn in FY’15), while cost of sale to revenue grew from 51.53% in FY’15 to 56.80% in FY’16.

Being a market leader in the industry, the company continues to produce in large quantities to meet the demand for its products and also maintain market share which we expect to continue going forward.