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Saturday, December 10, 2022

Heineken Sees Value in Beaten Down Nigerian Breweries with N245mn Share Purchase

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Heineken Brouwerijen B.V the major foreign shareholder in Nigerian Breweries has purchased N245 million worth of shares in the beaten down brewer in a sign that the major investor sees value in its Nigerian subsidiary.

Heineken increased its stake in NB by purchasing a total of 6.89 million shares in the open market at an average price of N35.67 per share.

The date of the transaction was between the 19th and 21st August, 2020, according to a recent filing. Nigerian Breweries shares are down some 81 percent in 3 years, since it peaked at N191 per share in mid 2017, (see ugly chart below).

NB 5 year Chart

Heineken may be a believer that the shares have fallen too far and is seeing value at these levels.

Our take at MoneyCentral is to watch what the smart money does and follow suit.

Nigerian Breweries Plc, reported a 98.4 percent year on year (YoY) decline in profit after tax (PAT) to N83.9 million in its unaudited second quarter (Q2) 2020 results.

The weakness in earnings reflected lower quarterly sales and higher finance cost. Revenue tumbled by 21 percent YoY to N68.6 billion in Q2’20.

The dip in revenue coincided with lockdown restrictions imposed in major beer markets (Lagos, Oyo and Abuja) in the quarter.

Nigerian Breweries was once the second largest listed company in Nigeria with a market cap above N1 trillion. Today its market capitalisation is a paltry N287 billion.

 

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