Champion Breweries Plc has capitulated to the foreign exchange headwinds that undermines economic growth as the company posted a net loss even though the hike price of key products helped underpin sales.
For the first six months through June 2024, the brewer posted a loss after tax of N386.66 million, from a profit position of N29.03 million.
The loss was due to a foreign exchange revaluation loss of N910.73 million.
Consumer goods firms in Africa’s most populous nation are reeling from imported inflation and foreign currency risk exacerbated by the sudden devaluation of the Naira last year.
The naira has depreciated against the US dollar by 69.47 percent under the current administration led by President Bola Ahmed Tinubu amid the implementation of foreign exchange reforms.
The Consumer Price Index (CPI), which measures the rate of change in prices of goods and services, further rose to 34.19 per cent in June, compared to 33.95 per cent in May, the National Bureau of Statistics (NBS).
There is light at the end of the tunnel for investors of Champions Breweries as foreign exchange losses are exceptional and one-off items that don’t recall at all times. Of course, there are expectations that the Naira will stabilise following the reforms by the current administration.
Further analysis of the financial statement of Champions Breweries showed there were improvements at the top line (sales), and the brewer makes profit from core operations even amid rising input costs and the vagaries of raw material price.
Revenue surged by 67.36 percent to N9.54 billion as at June 2024, thanks to price adjustments as the company needs to transfer spiraling input costs to the final consumers in the form of higher prices.
Operating profit spiked by 679.77 percent to N591.93 million as at June 2024 from N75.91 million the previous year.
EnjoyCorp Limited recently successfully completed the acquisition of 86.5% stake in Champion Breweries plc, a prominent figure in the regional brewing industry.
EnjoyCorp acquired 100% shareholding in The Raysun Nigeria Limited, which in turn holds the 86.5% stake in Champion Breweries plc listed on the Nigerian Exchange Group (NGX).
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