NIGERIAN BREWERIES PLC H1'22 - Still on track for a good year
| Consolidating on its Q1’22 performance, Nigerian Breweries’ half year earnings revealed a 143% y/y growth in bottom line to ₦18.7 billion (Vetiva: ₦22.8 billion), driven by a 77x q/q improvement in its Q2’22 PAT. This has resulted in a half year EPS of ₦2.32, compared to ₦0.96 in H1’22 and consistent with NB’s 100% dividend policy raises the half-year expected dividend payout to ₦2.32 per share. | |||||
| Q2 solidifies performance trajectory Despite the stronger pricing implemented across board during the year, NB’s volumes have continued to thrive on increased demand across sub-segments. We believe that a key factor in the company’s volume push is the successful take off of its Desperados brand, which has been supported by extensive marketing and distribution. Furthermore, we hold that the industry-wide premiumisation trend has proven beneficial to the company, especially in its Lager and Malt subsegments, which has also been supported by the increase in output capacity, specifically in the Malt segment. Evidently, the mix of sturdier industry pricing (Lager: +3% y/y, Malt: +4% y/y) and volumes resulted in a 32% y/y rise in the quarter’s Revenue to ₦134.0 billion. |
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| Summarily, we estimate a full year PAT of ₦32.5 billion for the firm, which translates to an EPS of ₦3.96 and a DPS of ₦3.96 (Dividend yield: 8.3%, at a current price of ₦47.70 per share). That said, we arrive at a one-year target price of ₦52.49 per share and rate the stock a HOLD. |
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