For the second quarter of the year ending June 30th, 2023, Nigeria Breweries Plc recorded an exchange rate loss of N70.6 billion.
This is in accordance with the data in its interim report for the first half of the year, which was just published.
Key highlights 2023 Q2
- Net revenue N154 billion +13% YoY
- Gross Profit N68.4 billion +21.5% YoY
- Operating profit N26.6 billion +119.7% YoY
- Net Finance Cost N77 billion +970.8%
- Pre-tax lossN50.2 billion
- Gross margins 44.4% versus 41.3% YoY
- Operating profit margins 17.3% versus 8.9% YoY
- Working capital -N318.6 billion
- Retained earnings N35.5 billion versus N80 billion (2023 Q1)
- Loss Per Share N4.6
Insights: With the revaluation of its dollar-denominated debts, the losses were caused by the unification of the currency rate, which resulted in foreign exchange losses.
- The company reported a net loss on foreign exchange of N70.6 billion taking the year-to-date exchange rate loss to N85.2 billion.
- The losses contributed to a massive N47.7 billion reduction in net assets.
- Important to add that the losses did not impact cash as the company still has a healthy cash balance of N34.9 billion.
- However, its negative working capital suggests it has to find money to repay its loans when they fall due within a year. It could also restructure the loans.
- The current losses are likely to impact full-year profits considering that NB also reported a profit after tax of N13.1 billion last year (2022).
- NB has so far reported back-to-back losses in the first two quarters of the year after reporting a loss before tax of N17.4 billion