Nigerian Breweries 9M:2022 Earnings Note -Sailing Against the Tides
Slow Q3 Performance Couldn’t Stop the Shine
The overall trajectory of NB remains solid, evidenced by the 27.2% YoY rise in
Revenue performance. We observed some level of adjustments in prices since
the beginning of Q2, but the juries are still out on the volume component of
the revenue data. The revenue direction was instrumental to improved gross
and operating margin position as of 9M 2022. Nonetheless, the three months
ending September 2022 were clogs in the firm’s operational performance
wheel, as a disproportionate rise in Cost of Sale hampered the margin position.
We also observed a significant rise in marketing and distribution expenses,
which we hinge on improved brand awareness creation and the rising energy
cost. Consequently, the group recorded a Loss of NGN3.99bn for the three
months ending September 2022.
Nonetheless, we still maintain our target price at NGN63.43 per share.
ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape.
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