Nigeria Breweries Plc recorded an exchange rate loss of N70.6 billion for the second quarter ended June 30th, 2023.
This is according to the information in its recently released interim report for the first half of the year.
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
With the revaluation of its dollar-denominated debts, the losses were caused by the unification of the exchange rate, which resulted in foreign exchange losses.
The company’s net loss on foreign exchange for the quarter totaled N70.6 billion, bringing the year-to-date loss due to exchange rates to N85.2 billion.
The losses resulted in a significant N47.7 billion drop in net assets. It’s important to note that the corporation still has a good cash position of N34.9 billion, therefore the losses had no financial impact.
However, given its negative working capital, it is likely that it will need to raise cash to pay back its debts when they are due in a year. The loans could potentially be restructured.
Given that NB also recorded a profit after tax of N13.1 billion last year (2022), the current losses are likely to have an effect on full-year profits.
After posting a loss before tax of N17.4 billion in the first quarter of the year, NB has so far reported consecutive losses in the first two quarters.
