Nigerian Breweries released its Q1 2020 results characterized by shrinking topline performance, heightened operating expenses and dwindling profits amid the economic ravage of the coronavirus on the country.
“We believe this, coupled with other challenges faced such as weak consumer spending, challenging operating environment and the negative effect of implemented excise duties, remained challenges for the company,” Investment One research analysts said.
Looking closely at the result, revenues were flat compared to the first quarter of 2019 earnings as the company recorded net revenues (post-excise duty charges) of N83.2 billion.
According to the parent company, Heineken, beer volume was broadly flat during the quarter under review and declined by a high single digit rate in March 2020 on the back of price increases undertaken in February and the restriction on distribution of alcohol beverages.
Due to its aggressive marketing strategies and credit sales resulting in an increase in trade and other receivables, cash from operations printed negatively for the first time since Q1 2018.
Resultantly, profit before tax (PBT) margin was down by 380 basis points year on year (y/y) at 9.9 percent as PBT printed at N8.3billion for the quarter.