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Nigeria Breweries, the largest brewer by market capitalisation, has slashed its final dividend by 14.20 percent from a year ago as profit improves even amid rising finance costs, a red-hot inflation, and currency risk.
The company in a statement on the NGX said it declared a final dividend of N1.03 for 2022 financial year, or N10.57 billion, and that compares with N1.20 or N12.32 billion last year.
It is important to note that the brewer has a dividend payout of 76 percent, 95.25 percent, according to MoneyCentral calculations. It has a dividend yield of 3.05 percent.
The dividend payout ratio is the ratio of the total amount of dividends paid out to shareholders relative to the net income of the company. It is the percentage of earnings paid to shareholders via dividends.
A reduction in the ratio means the company is conserving cash for reinvestment in the business or for pursues of funding other expansion projects so as to consolidate on its market share.
Despite a challenging operating environment, operating profit spiked by 24.72 percent to N51.75 billion as at December 2022 from N41.49 billion the previous year.
Net income followed the same growth trajectory as it increased by 4.02 percent to N13.18 billion in the period under review from N12.67 billion the previous year.
The brewer suffered net loss on foreign exchange of N26.34 billion, which is a surge from 2021’s N7.04 billion.
Of course, Nigerian Breweries and peer rivals have benefitted from increased domestic demand that has supported volume and turnover growth despite the strained disposable income and the current economic instability.
The firm’s -wide price increase, prioritization of premium brands, improved domestic sales and increasing production capacity all contributed to its strong performance as it continues to improve turnover through its recent capacity expansion project in Ama brewery.