Business
Nigerian Breweries’ profit drops by 27%
One of Nigeria’s largest breweries and second most capitalised quoted company, Nigerian Breweries (NB) Plc witnessed significant decline in its profitability in 2016 as the brewing giant struggled with rising costs.
Audited report and accounts of NB for the year ended December 31, 2016 indicated that turnover rose from N293.91 billion in 2015 to N313.74 billion in 2016. Gross profit meanwhile dropped from N144.17 billion to N135.52 billion. Profit before tax declined by 27.2 per cent from N54.51 billion to N39.67 billion. Profit after tax also dropped from N38.06 billion in 2015 to N28.42 billion in 2016.
Further analysis also showed decline in the underlying fundamentals of the group. Pre-tax profit margin declined by 31.8 per cent from 18.55 per cent in 2015 to 12.65 per cent in 2016. Return on assets (ROA) declined by 27.55 per cent from 10.68 per cent to 7.74 per cent while return on equity (ROE) dipped by 22.4 per cent from 22.08 per cent to 17.13 per cent.
Read also: NSE LIVE! Equities suffer N33b loss as pressure mounts on Nigerian Breweries
Directors of the company have recommended 25 per cent reduction in the cash dividend to shareholders, following the same trend as the profit decline.
The company would be distributing a total of N28.39 billion to shareholders as total dividend for the 2016 business year, representing a dividend per share of N3.58. However, this represents 25.4 per cent reduction on N4.80 per share paid for the 2015 business year.
A final dividend of N20.46 billion would be distributed to shareholders on the basis of N2.58 per share. The company had earlier paid interim dividend of N7.9 billion to shareholders, equivalent to N1 per share.
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