30 July 2018 ( Lagos ): Q2 PBT and PAT of N12.3bn and N8.2bn both declined -26% y/y and -33% y/y respectively. Notwithstanding, analysts expect a slightly negative-to-neutral reaction by the market because on an annualised basis, H1 PBT of N27.6bn is broadly in line with consensus estimate of N54.6bn.   

On a positive note, Q2 sales of N89.7bn grew 8% q/q and beat analyst's estimate by 5%. Net interest expense declined by -53% y/y.

On a negative note, Q2 PBT declined y/y and q/q by -26% y/y and -19% q/q respectively. Additionally, PAT declined by -33% y/y and -19% q/q respectively. According to Heineken’s (NB’s parent) trading statement, unit volumes for Nigeria declined by mid-single digits during the period. This suggests that NB raised prices to offset unit volume weakness. Nonetheless, Q2 gross margin contracted by c.-341bps y/y to 42.4%.

Analysts rate the shares Neutral. 

Source : Tunde Abidoye and Gregory Kronsten, Olubunmi Asaolu, Chinwe Egwim from FBNQuest Capital Limited.

Reporting for EasyKobo on Tuesday, 31 July 2018 in Lagos, Nigeria