Nigerian Breweries rallies against economic challenges with 34% increase in operating profit for H1 2024

Nigerian Breweries Plc, a leading total beverage alcohol company in Nigeria, has posted a 34% increase in operating profit for its half-year period ended 30 June 2024.

The unaudited results, which were released to the Nigerian Exchange Group (NGX),also revealed a 73% increase in revenue in the period despite the challenging operating environment characterised by soaring inflation, exchange rate volatility, security challenges, elevated input costs, and rising cost of living.

Speaking on the result, Hans Essaadi, Managing Director/CEO, Nigerian Breweries Plc said: “In the 6 months ended 30 June 2024,Nigerian Breweries demonstrated resilience and is on the path to recovery as seen in the results delivered despite the challenging external environment characterised by high inflation and heightening operating costs.”

“Our revenue grew by 73% in the half-year compared to the same period in 2023. The growth was driven by strategic pricing, innovation volume growth, and market recovery. Cost of sales, distribution, and admin expenses increased by 46%, largely due to inflationary pressure and forex devaluation impacting imported materials. We also continue to invest behind our brands and categories and support the recovery of the market.”

Mr Essaadi also disclosed that the company is in the process of initiating a Rights Issue to raise up to N600 billion in additional capital to restore the business to profitability and enhance operational and financial stability as part of its resilient and forward-thinking strategy.

“The funds raised will be used to eliminate our foreign exchange-denominated debts and reduce our local debts, thereby mitigating our exposure to the continuing economic challenges. Through our cost-saving and other efficiencies initiatives, we recorded a 34% increase in operating profit, signalling the resilience and strength of our operations”, Mr Essaadi explained.

“We are conscious of the continued challenging operating environment with double-digit inflation and pressured consumer income spending. However, we continue to focus on our strategy to deliver value to our shareholders while contributing to the country’s economic development”, headded.

Speaking on behalf of the Board, Legal Director and Company Secretary, Uaboi Agbebaku, assured that “the Board remains confident in our long-term strategy to deliver value to our shareholders and re-affirms the Company’s enduring commitment to Winning with Nigeria through people development, strategic innovation, operational efficiency, and community impact”.

A member of the HEINEKEN Group, Nigerian Breweries Plc is Nigeria’s pioneer and largest brewing company. Incorporated in 1946 as “Nigerian Brewery Limited,”the company made history in June 1949 when the first bottle of STAR lager beer rolled out of its Lagos brewery bottling line. Today, it has a rich portfolio of 19 high-quality brands (Heineken, Desperados, Maltina, Life, Amstel Malta, Gulder, Fayrouz, and Legend) produced from nine breweries and distributed nationwide.