Nigerian Breweries Plc’s workforce has been reduced by 380 workers as the brewer struggled with the loss induced by surging cost and the naira floating policy of the Central Bank of Nigeria last year....CONTINUE READING
NB joined brewery firms like International Breweries Plc which declared N59.5bn net loss in 2023 and Champions Breweries which is also struggling.
In 2023, breweries in Nigeria struggled with the high cost of operations and sourcing expensive foreign exchange to purchase raw materials for their beer and soft drink business.
Nigerian Breweries audited financial statement results for 2023 analysed by THE WHISTLER show that their desired destination of sustained profitability is still a long way off.
The brewery company which is the largest listed beer maker on the Nigerian Exchange Limited posted a revenue growth of 9 per cent from N550.5bn in 2022 to N599.5bn by the end of 2023.
The company recorded an unimpressively yearly loss which is huge by the standards of a firm whose business model is based on spending heavily to keep rivals out of the picture.
From a profit of N13.2bn in 2022, the company saw a scourging loss of N106.3bn driven principally by naira scarcity and the naira devaluation, which officially began on 14 June, 2023.
The company was able to curtail personnel expenses, which rose marginally from N51.3bn in the preceding year to N55.5bn in 2023 but was roped with N36.4bn finance cost which surged from N8.4bn in 2022.
Nigerian Breweries has now lost N153.3bn on foreign exchange transactions spiking from the N26.3bn loss in 2022.
The company paid more deposits for imports of N16.2bn up from N6.9bn in 2022, representing naira deposits for foreign currencies purchased to fund letters of credit and forwards, as well as futures.
The N16.2bn is related to imported raw materials, spare parts, and machinery.
About 99 per cent of the company’s products were sold in Nigeria while only N335.46bn were export proceeds, making it difficult for them to source forex for imports of raw materials.
By the end of the year, staff strength of Nigerian Breweries dropped by 380 from 2,685 in 2022 to 2,305 workers.
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