According to its Q1’2020 unaudited financial report released to the investing public on Monday 20th April 2020, Nigeria Breweries Plc., a foremost brewer and the leader in the Nigeria brewing sector (with about 57% of total market share) reported a dip in Revenue and Profit After Tax (PAT) in Q1 2020.
According to the numbers published by the brewer in its financial statements obtained from the Nigerian Stock Exchange (NSE) website, the firm’s Revenue fell by 0.09% to ₦83.20bn compared to ₦83.28bn in the corresponding period of 2019. This could be jointly attributed to seasonality effect on demand (little social activities is usually associated with Q1), rising impact of inflation on consumer purchasing power, and the disruption caused by the Covid-19 pandemic (in Nigerian) since the turn of March 2020.
Furthermore, major cost items were on the rise during the period. Specifically, Cost of sales rose mildly by 0.23% to ₦48.33bn; Marketing and distribution expenses rose by 13.5% to ₦18.79bn; Administrative expenses rose by 16.09% to ₦5.34bn, and Finance cost rose by 1.46% to ₦2.65bn compared to the corresponding period of 2019.
Consequent to the above, the firm’s Profit Before Tax (PBT), Profit After Tax (PAT), and Earnings Per Share (EPS) all weakened by 27.8%, 31.4%, and 31% respectively to ₦8.2 7bn, ₦5.50bn, and 69k compared to ₦11.46bn, ₦8.02bn and 100k in Q1’2019.
Despite the softening performance reported in Q1’2020, Liquidity ratios of the firm improved relative to the prior year. Precisely, Current ratio settled at 0.54:1 compared to 0.52:1 in Q1’2019. Similarly, Acid ratio printed at 0.26:1 compared to 0.20:1 a year earlier.
This reflects an improvement in the firm’s liquidity position compared to H1’2019.