International Breweries Plc, the Nigerian unit of Belgian brewer Anheuser-Busch InBev recorded a net loss of US$10.49 million (N3.8bn) for the year ended December 2018 despite strong revenue growth of 230% to US$332.97m (N120.6bn).
The company said that the growth was driven by the launch of its new brewery in Sagamu, Ogun State as well as a strong marketing push by the company.
However, a rise in finance cost coupled with a 29% increase in foreign exchange loss and 303% increase in interest expense on borrowings was partly to blame for the full-year loss.
During the period under review, administrative expenses also increased 360% to US$43.62 million (N15.8bn) while marketing expenses also climbed up 244% to US$57.7 million (N20.9bn).
The beverage company manufactures and distributes alcoholic and soft beverages in Nigeria under the Brands; Trophy Lager, Trophy Black, Castle Milk Stout, Castle Lager, Redds, Hero, Grand Malt, Betamalt, and Voltic Water.
The Nigeria Stock Exchange-listed firm has been ramping up its capacity in the country as demand for its products increase.
The company has also been consolidating its holdings in the country to take on Nigerian Breweries Plc and Guinness Nigeria plc who are working to garner a significant market share through innovations.
The company merged its three breweries in the country (Intafact Beverages Ltd, Pabod Breweries and Int’l Breweries) into one entity.
Backed by the world’s largest beer maker, AB InBev, the company is expected to invest a total of US$400 million in the newly built Sagamu Brewery.
Speaking during a media briefing in South Africa, AB InBev’s chief executive officer, Carlos Brito, said that the investment is expected to improve the firm’s performance in the Nigerian market.
Carlos highlighted that AB InBev sees further African investment, especially across the South African and Nigerian market.
The multi-million dollar investment by AB InBev seeks to consolidate its position ahead of its rivals, including Heineken NV, in the continent amid the rising household incomes and beer consumption across a population of about 1 billion people.
Demand in Africa was cited by AB InBev as a major factor in the decision to buy Johannesburg-based SAB Miller in 2016, a combination that brought together brands such as Budweiser and Stella Artois with SAB’s best sellers such as Castle lager.