Analysts project positive outlook for Nigerian Breweries

Analysts and market watchers have projected that Nigerian Breweries still has strong fundamentals despite the sustained foreign exchange loss on its books on the back of the devaluation of the naira.

In its unaudited results filed with the Nigerian Exchange Limited, the brewer’s FX loss, which was N86.83bn as of September 2023, had risen by about 84.83 per cent to N160.48bn at the end of the same period in 2024.

Quarterly, the results indicated a N48.21bn increase in the FX losses of the company within three months. In June, the firm’s FX losses stood at N112.27bn.

The PUNCH reports that Nigerian Breweries suffered a N153bn forex loss in 2023 due to currency devaluation and it recently announced a N599bn rights issue to cut the FX losses.

Despite recording a 74.9 per cent growth in its revenue to N703bn at the end of the third quarter, NB stayed in the reds as loss after tax surged by 161.39 per cent to N149.50bn.

Speaking on the company’s Q3 results, despite the loss at the end of the period, analysts said the outlook for the brewer remained positive.

Commenting on the results, the Managing Director of Crane Securities, Mike Eze, said the fundamentals in the results point to a future return to growth by the brand.

Eze, who lamented the decline in the value of the naira, said the misfortunes of the Nigerian currency had adversely affected quoted and private companies in the country.

He, however, remained optimistic that stability would return to the market to ensure businesses that invest reap the benefits.

 “It is quite unfortunate that the ill fortunes of the naira have recalibrated the numbers for many businesses. Whether you are importing your inputs or you are sourcing them locally, the affliction has a way of affecting everybody because the markets are connected.

“But I commend the Nigerian Breweries for its focus on retaining its leadership and presence. The growth we are seeing in both its revenue and gross profits are the results of its determined drive to return to profitability,” Eze said.

Managing Partner, Francona Consulting, an Abuja-based investment intermediation firm, Chibueze Ona, said the result showed that Nigerian Breweries was poised to reclaim its status as one of the most valuable brands on the Nigerian capital market.

Ona said, “I think that Nigerian Breweries is doing exceedingly well given the circumstances. That is why I commend the management for its determination to ride the headwinds of the Nigerian market. Although there is still a short way to go towards posting a bottom line that will delight short-term investors, the present numbers indicate that the distance to be covered is no longer remote.”

He also decried the economic situation in the country, which he said presented a major challenge for investors.