Nigerian Breweries Plc (NB) Q3-2020 financials show a contraction in gross revenue by 0.7% to N234.04 from the N235.68bn generated in Q3-2019. This is coming in the midst of intense competition in the breweries industry couple with weak demand brought about by the COVID-19 pandemic. Cost of Sales, however, increased by 3.3% from N139.56bn to N144.09 leading to a 6.5% reduction in gross profit. Notably, Nigerian Breweries gross profit decreased from N96.17bn to N89.95bn in Q3-2019 and Q3-2020 respectively.
Higher Expenses pressure Operating Profit.
Despite the reduction in gross profit, operating expenses trended higher putting weight on profitability. Specifically, Nigerian Breweries operating profit declined by 10.7% to N22.49bn compared to the N25.17 earlier recorded in Q3-2019. The moderation to profit was further compounded by a 5.3% reduction in finance income even as finance cost advanced by 43.4% emanating from new debt issuance.
Interim Dividend of 25 kobo in the Midst of Dwindling EPS
Nigerian Breweries Profit before Tax waned by 36.3% with a 43.5% contraction in Profit after tax. Notably, Profit after tax compressed to N6.94bn compared to the N12.28bn recorded in Q3-2019. This led to downward pressure on the EPS from N1.53 to N0.89. The Company, however, declared an interim dividend of 25 kobo to be paid on 1st of December, 2020.
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