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CASTLE MALTING NEWS in partnership with www.e-malt.com Dutch
06 May, 2021



Brewing news Nigeria: Four leading brewers post total revenue growth of 27.94% for the first quarter

Nigeria’s four leading brewing companies posted a total revenue growth of 27.94 per cent in the first three months of the year, an analysis of data from their unaudited financial statements showed, the Punch reports.

The companies’ combined revenue rose to N189.63 bln in the first quarter of 2021 from N148.22 bln in the same period of 2020.

Nigerian Breweries Plc saw its revenue grow by 27 per cent to N105.68 bln in Q1 2021 from N83.23 bln in the same period a year earlier. Its profit before tax rose by 38.8 per cent to N11.51 bln.

Guinness Nigeria Plc increased its revenue by 53.88 per cent to N42.61 bln in the period under review from N27.69 bln in Q1 2020. Its pre-tax profit jumped to N3.17 bln from N71.39 mln.

International Breweries Plc grew its revenue to N38.96 bln in Q1 2021 from N35.35 bln in the same period last year. Its loss before tax narrowed to N3.56 bln from N7.69 bln.

Champion Breweries Plc saw its revenue rise to N2.38 bln in Q1 2021 from N1.95 bln in Q1 2020 while its profit before tax surged to N309.19 mln from N197.49 mln.

Analysts at Financial Derivatives Company Plc, in its March economic bi-monthly update, noted that the brewery industry was adversely affected by the global economic downturn, lockdown and disruption induced by the pandemic.

They said the impact of tough fiscal regulation (excise duties, VAT at 7.5 per cent) and higher cost pressures continued to weigh on the sector’s performance, coupled with lingering weak macroeconomic fundamentals pressuring consumers’ disposal income and consumer spending.

The analysts said, “In addition, the forex illiquidity and weaker naira have increased the cost of production of breweries, which have a high import content.

“However, the breweries industry is expected to deliver great value in the medium to long term on the back of Nigeria’s growing population and favourable demographics, low consumption per capita, and increasing opportunities for exports under the African Continental Free Trade Area Agreement.”

According to FDC, there is limited room for pricing, and players will need to improve market share through brand visibility.

“Breweries will continue to leverage on product innovation to remain competitive in the face of constrained pricing actions,” the analysts added.





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