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Consistent profit growth in the past three years has helped wipe out Champion Breweries Plc accumulated losses, which paves the way for the brewer to pay dividends to shareholders.
For the year ended December 2021, Champions Breweries net income surged by 519.83 percent to N984.23 million from N158.79 million as at December 2020.
The company’s revenue has been growing since 2016, supported by volume growth and pricing as the brewer is expanding production capacity across the company.
The maker of champion lager beer and Champ Malt saw sales spike by 49.07 percent to N10.51 billion in December 2021 from N7.05 billion the previous year.
A consistent strong profit growth amid inflationary pressures, currency volatility, and supply bottleneck helped the firm post retained earnings of N1.08 billion in 2021 from accumulated losses of N92.10 million the previous year.
Gross profit was up 81.94 percent to N3.53 billion in the period under review from N1.94 billion the previous year. Gross profit margin moved to 33.64 percent in the period under review from 27.52 percent the previous year.
Operating margin otherwise known as Earnings Before Interest and Tax (EBIT) margin increased to 16.53 percent in December 2021 from 6.54 percent the previous year.
Net profit margin rose to 9.36 percent in the period under review from 2.25 percent the previous year.
The strong financial position of the company made it an acquisition target by foreign investors, and a capital injection from new owners will strengthen Champion Breweries balance sheet and enable it compete in the fast-growing Nigerian beer market.
Heineken B.V., the Dutch brewer, has purchased an additional 1.9 billion ordinary shares of Champion Breweries located in Uyo, Akwa Ibom state as it continues to bolster its share of the beer market.
The purchase was consummated by Heineken through its subsidiary, Raysun Nigeria Limited. Heineken purchased the new shares at N2.60 per unit at a total of N4.95 billion on January 7,2021.
With this share acquisition, Heineken now has an 84.7 percent stake in Champion Breweries, a move to further expand its control of the Nigerian Beer market and put it in a strong position as the majority shareholder to make a takeover attempt.