April 17, 2024

Breaking: How Nigerian Breweries Got into Financial Trouble…Records N145 Billion Loss in 2023

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Nigerian Breweries, suffers N145bn loss, highest in company's history

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By Chizoma Ebele (Business Desk)

Poor management, excessive reliance on importation of products and failure to embrace local content and strategic backward integration strategies have led the almost a century company, the Nigerian Breweries into serious financial trouble, as it has suffered an operating loss of N145 Billion in a single financial year.

(File) L-R: Corporate Affairs Director, Nigerian Breweries (NB) Plc, Sade Morgan; Outgoing Chairman, NB Plc, Chief Kola Jamodu; President, Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye; former Chairman, NB Plc, Asue Ighodalo; Managing Director, NB Plc, Hans Essaadi and Company Secretary/Legal Director, NB Plc, Uaboi Agbebaku during the 77th Annual General Meeting of Nigeria Breweries Plc held on Wednesday, April 26, 2023 at Civic Centre, Lagos

The shocking result posted by the company made nonsense of the improved revenue, which rose by 8.9% to approximately N600 billion, according to its audited earnings report released last Friday February 16, 2024.

In an attempt to sustain shareholders confidence, the directors of the company told them that, they have decided to start importation of Heineken from South Africa and also buy a local wine and spirit manufacturing company in Nigeria.

Nigerians are drinking more in a depressed economy… Increased sales for Nigerian Breweries products, more revenue, more loses.

Nigerian Breweries report stated that, its plan is on track to buy a controlling stake of 80 per cent in Distell Wines & Spirits Nigeria Limited and fully acquire the import business of Heineken Beverages (Holdings) Limited, both are part of strategic moves to diversify revenue streams and buck up the company’s earnings.

The two deals, according to the poor performing board, are worth N7.01 billion.

The N145.3 billion pre-tax loss suffered by Nigerian Breweries for the financial year, ended December 2023, its biggest since the company started operation in Nigeria, in 1946.

A senior management staff told Midwest Herald reporter in Iganmu, Lagos that the increased sales recorded by Nigerian Breweries were drained by the over dependence on importation of products and the board’s refusal to embrace local content in the company’s production line.

Anxious Nigerian Breweries Shareholders (File)

This position is supported by the revelation that 50% of production input costs are imported and denominated in foreign currencies and contribited N153.3 billion in net loss on FX transactions, in comparison to N26.3 billion suffered in the previous year.

“The lack of creative management made nonsense of the huge increase in sales and sent Nigerian breweries bottom-line into the present unprecedented negative position”, the angry staff who is scared of possible downsizing of workforce told Midwest Herald.

Nigerian Breweries heads to South Africa Heineken for succour

Rather look inward, the company also announced that, it would execute an upward review of the prices of its products effective from today, February 19, 2024 to cushion the “continued rising input cost and the need to mitigate the impact.”

But majority of the shareholders are of the view that, the Nigerian Breweries may further slide into unprofitable era if it continues to operate with the present 50% importation business plan.

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