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Introduction:
In the beverage market arena, beverage behemoths, International Breweries and Nigerian Breweries face off in Q3 2023 financial battles. In this article, you will discover the striking contrasts in these two companies’ Q3 2023 financial reports as revenue surges for one while inflationary pressures challenge the other. This explores the divergent paths in operating profits, finance costs, and post-tax losses, shaping the narratives of two industry titans.”
Revenue Race: Divergent Paths
While International Breweries boasts a 37.98% YoY revenue surge, reaching N67.65 billion, Nigerian Breweries takes a more tempered growth route with a 4.20% YoY increase, totalling N124.382 billion in Q3. The dynamics of their revenue performances set the stage for a compelling comparison.
Operating Profit: Peaks and Valleys
International Breweries encountered a positive trend in Q3 with a 158.29% YoY surge in operating profit, totalling N2.30 billion. In contrast, Nigerian Breweries faces a 22% YoY decline, settling at N27.259 billion for the nine months. The impact of inflation on operating costs shapes the divergent paths of these brewing giants.
Finance Cost Feud: A Tale of Two Finances
The financial arena witnesses a clash as both companies grapple with contrasting financial landscapes. While International Breweries contends with a 500.48% YoY increase in net finance costs, reaching N4.37 billion, Nigerian Breweries sees an astronomical 546.98% YoY growth, resulting in a staggering nine-month net finance cost of N105.425 billion. The battleground of finance costs reveals the unique challenges these brewing titans face.
Post-tax Loss Drama: The Aftermath
In the aftermath of financial clashes, International Breweries reports a 57.27% YoY reduction in post-tax loss, settling at N4.95 billion. Meanwhile, Nigerian Breweries witnessed a 141% YoY surge in quarterly post-tax loss, reaching N9.596 billion, contributing to a nine-month total loss of N57.195 billion. The battle scars of inflation and finance costs echo in the bottom lines of these industry giants.
Dividend Dilemma: Shareholder Impact
For Nigerian Breweries, the continuous decline in retained earnings raises concerns about its ability to maintain dividend payments. With retained earnings dwindling to N22.995 billion from N90.774 billion in the corresponding period of the previous year, the once solid dividend payment record faces challenges. Shareholders brace for potential disappointment as the company navigates the complex terrain of earnings decline.
Share Price Woes: A Contextual Lens
Contextualizing Nigerian Breweries’ growth challenges, the company’s share price witnessed an 18% decline in 2022, with a recent 2.6% dip, closing at N38 per share, contributing to a YtD loss of 7.2%. These figures underscore a continued downward trend, signalling potential concerns for investors and market observers. As the share price woes persist, Nigerian Breweries faces the imperative to diversify systematic risks and proactively address macroeconomic challenges.
Conclusion:
The brewing giants’ face-off paints a complex picture of growth and challenges. As International Breweries and Nigerian Breweries navigate financial hurdles, contextual factors such as share price declines add layers to their strategic narratives. The industry watches closely as these giants redefine their paths in pursuing stability and resilience.”
