Nigeria's brewing company, Nigerian Breweries Plc, has disclosed its audited financial results for the year ending December 31, 2023. The report shows a net loss of N106 billion due to the devaluation of the naira affecting foreign exchange transactions.
The company's revenue increased by 9% compared to 2022. Despite this growth, operating profit decreased by 15% to N44.5 billion from the previous year. This decline is attributed to higher input costs, a one-off reorganization cost, and other economic pressures.
Mr. Hans Essaadi, Managing Director/CEO of Nigerian Breweries Plc, commented on the results: “The business performance of 2023 reflects the challenging economic environment in Nigeria. These severe economic conditions include persistent cash scarcity, removal of fuel subsidies resulting in a notable surge in energy cost, naira devaluation, foreign exchange scarcity, and continued challenged consumer spending in the midst of high inflation." He noted that despite these challenges, there was a 9% growth in revenue due to a positive price mix but acknowledged that "our efforts were undermined by the impact of the devaluation of the naira."
In response to these challenges, Nigerian Breweries focused on reducing risk through strategies such as efficient sales operations and strong cost management. Mr. Essaadi stated: “Going into the new year, we are conscious of the continued severe macro-economic challenges – rising inflation, heightening operating costs and pressured consumer income spend." He expressed optimism about future opportunities that could create value for stakeholders.
One such opportunity is acquiring an 80% stake in Distell Wines and Spirits Limited. This acquisition grants exclusive rights to import Heineken Beverages wines, spirits, and ciders from South Africa into Nigeria and includes production rights for imported brands locally.
Essaadi explained: “This acquisition is part of efforts to provide access to a complementary multi-category portfolio of fast-growing wines and spirits brands and capture significant growth opportunities in the wines and spirits segment.”
He emphasized that "the Board and Management will ensure that the Company builds on its more than 77 years’ experience of operating in Nigeria" while remaining resilient with its broad portfolio and strong supply chain footprint.
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