February 17, 2025/CSL Research
Nigerian Breweries’ FY 2024 audited financial results revealed a strong 80.8% y/y increase in Revenue, crossing a ₦1 trillion mark to reach ₦1,084bn from ₦599.643bn in FY 2023 and surpassing our FY24 forecast of ₦959.5bn by 13%. Likewise, on a q/q basis, the company’s Revenue rose by 65.2% in Q4 2024 to ₦373.6bn from ₦226.1bn in Q3 2024. This new revenue milestone in FY 2024 is primarily attributed to a c.43% price increase across their widely accepted product segments, which was essential for maintaining margins.
The Cost of Sales (excluding depreciation) increased at a faster rate than Revenue, rising by 105.1% y/y to ₦727.06 billion, compared to ₦354.56 billion in FY 2023. On a q/q basis, Cost of Sales was up by 51.9% to ₦252.91 billion in Q4 2024 from ₦166.47 billion in Q3 2024. The sharp rise in costs was driven by a 115.2% y/y increase in raw materials and consumables, which totalled ₦615.54 billion, along with a 139.3% y/y rise in repairs and other overheads, reaching ₦46.7 billion. Consequently, the Gross Margin declined to 33.0% from 40.9% in FY 2023. Despite this margin compression, Gross Profit grew by 45.8% y/y, reaching ₦357.4 billion compared to ₦245.1 billion in FY 2023
The challenging business environment led to a significant rise in the company’s Operating Expenses (OPEX), which increased by 51.4% y/y to ₦236.2 billion. Selling and Distribution Expenses climbed by 44.5%, reaching ₦192.5 billion, up from ₦133.2 billion, while Administrative Expenses surged by 77.1% y/y to ₦39.6 billion, compared to ₦22.4 billion for FY 2023. Despite these rising costs, EBITDA grew by 36.1% y/y to ₦121.2 billion, up from ₦89.03 billion in FY 2023. However, the EBITDA margin dropped to 11.2%, falling by 3.7 percentage points from 14.8% in FY 2023. The company also reported ₦4.02 billion in Other Income from ancillary operations, which helped boost Earnings Before Interest and Tax (EBIT) to ₦69.9 billion, compared to ₦43.96 billion in FY 2023.
The company’s Finance Income surged to ₦4.03 billion in FY 2024, a significant increase from ₦513 million in 9M 2023. This growth was driven by higher interest income from bank deposits, as Cash and Cash Equivalents rose to ₦150.9 billion, up from ₦39.56 billion at the end of 2023. Management attributed this increase in cash holdings to the retention of a portion of the inflows from the recent rights issue. Meanwhile, ongoing currency instability since mid-2023 continued to impact the company’s foreign exchange transactions. This was reflected in a Net FX loss of ₦157.59 billion, a 2.8% rise from ₦153.33 billion in FY 2023.
Finance Cost surged by 173.5% to ₦99.46 billion in FY 2024, up from ₦36.36 billion in FY 2023, driven by higher interest payments on increased loans and borrowings. On the balance sheet, Total Loans & Borrowings declined significantly, falling by 68.8% to ₦209.05 billion from ₦652.1 billion in 9M 2024 and by 38.8% from ₦341.6 billion in FY 2023. This reflects management’s ongoing strategy of utilizing proceeds from the recent rights issue to reduce debt.
Overall, the company reported Pre-tax loss of ₦182.9bn compared with a Pre-tax loss of ₦145.22bn in FY 2023.
We have a Sell recommendation on the stock with a price target of ₦23.27/s. Current Price ₦33/s
Kindly click on the below link to download the full report.
Nigerian Breweries AFY 2024 QuickTake.pdf
