By Peter OBIORA InvestAdvocate
Lagos INVESTADVOCATE)-Beer maker, Nigerian Breweries Plc (NB) said on Tuesday its first quarter (Q1) 2015 pretax profit declined slightly 1.85 percent Year-on-Year (Y-o-Y) and 23.52 percent Quarter-on-Quarter (Q-o-Q) to N14.45 billion.
Cordros research say the decline followed a 113 percent Y-o-Y and 2.43 percent Q-o-Q rise in net finance charges.
“Elevated finance charges came on the back of higher interest rate – according to management – and increased borrowing which was apparent in an 84 percent surge in total debt (particularly bank overdraft, from December 2014),” the report added.
Profit after tax (PAT) grew by a marginal 0.42 percent Y-o-Y to N10.1 billion due to a 158 basis points (bps) Y-o-Y dip in effective tax rate to 30.03 percent.
“The poor Q-o-Q performance – PAT down 20.41 percent – is customary given that Q4 is usually the strongest quarter for brewers,’ the report noted.
The top Nigerian beer maker first quarter ended 31 March, 2015 which included the figures of Consolidated Breweries Plc (CB) following last year’s merger, shows that the combined revenue grew marginally Y-o-Y after successive declines recorded by NB pre-merger, in Q3-2014 (-5.74 percent) and Q4-2014 (-8.53 percent).
“The marginal increase in revenue was disappointing as it is yet to account for the anticipated synergetic benefit (in terms of volume) of NB’s merger with CB,” the Cordros report affirmed.
Share price of Nigerian Breweries at the close of business on the Nigerian bourse dipped 1.14 percent to N150.27 from N152; losing N1.73.
