Nigerian Breweries: 38% decline in PAT results in 40% decline in interim dividend   

26 October 2018 : The nine months ending 30 September 2018, has not been a good period of brewery mammoth Nigerian Breweries Plc.Leading brewery firm.The company reported a decline in its revenue and gross profit. Following this the company announced an interim dividend of 60 Kobo for the nine months ending 30 September 2018. Unfortunately, for its shareholders this is a also a 40% dip from the 100 kobo interim dividend announced in the corresponding period in 2017. 

According to the nine months results the company’s revenue shed 5.6%. While it did record gains, but not in the right places; the excise duty expense went up by 9%.Consequently, the Gross Profit of the company dipped by 11.37%, corresponding to the similar period in 2017.Although its marketing and distribution expense marginally went down by 0.8% and net finance cost massively declined by 33%, the PBT could not be saved, which lost 34%. Consequently, the Profit After Tax suffered a 38% decline from the corresponding year in 2017.

Earlier this year, in the period ending 30 June 2018, the company had posted a decline in its PAT, which according to them was caused by the the new excise duty regime and higher rate of beer introduced in June 2018 which further impacted the affordability in the period under review.

The government had okayed an amendment to the excise duty rates for alcoholic beverages and tobacco with effect from June 4. And according to the then Minister of Finance, Mrs. Kemi Adeosun, the new excise duty rates were spread over a three-year period from 2018 to 2020, to moderate the impact on prices of the products. As, the new excise duty regimes followed all-inclusive stakeholder engagements by the Tariff Technical Committee of the Federal Ministry of Finance with key industry stakeholders. Hence, the upward review of the excise duty rates for alcoholic beverages and tobacco is to achieve a dual benefit of raising the federal government’s fiscal revenues.

Reporting for EasyKobo on Friday ,26 October 2018 in Lagos, Nigeria

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