Just as we expected, Nigerian Breweries bounced back to profitability in Q1:2025. After the last two years of losses, the company swung back to profit in Q1:2025, thanks to strong sales, aggressive advertising, smarter cost controls, and less FX pain. Additionally, the company is not just brewing beer anymore. With full ownership of Distell Nigeria now in the bag, NB looks set to deepen its footprint beyond its traditional base and expand into wines, spirits and flavored alcoholic beverages. ...
2024 was a remarkable year for Nigerian Breweries Plc, as it made more than NGN1trn in revenue. However, just like many other consumer goods companies, rising inflation, a rapidly depreciating naira, and high interest rates continued to dampen its bottom-line profit, keeping it in the red zone. However, we are optimistic about the company’s growth in 2025, and it seems like recovery is really in sight for the company this year. To find out why and whether you should position in it, please rea...
A director at Nigerian Breweries bought 2,250,000 shares at 41.300NGN and the significance rating of the trade was 69/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years...
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 wh...
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 trajectoryDespite the stronger pricing implemented across board...
In the first quarter of the year, NB reported significant improvement in its performance, with topline and bottom-line expanding by 30% y/y and 78% y/y respectively. We believe that the growth in the beer maker’s Revenue came down to a mix of volume and price increases. The Malt segment, which has been gaining traction industry-wide may be responsible for the growth in turnover. Still, we recall that management indicated (as at FY’21) the success of its push for increased volumes from its ...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
A disappointing end to the year Similar to what we saw in Q320, Nigerian Breweries (NB) recorded a strong YoY growth of 18% in their revenue which printed at N103 billion over Q420. However, cost of sales grew by an astonishing 42% which dragged gross profit down by 18%YoY to N28.74 billion. Despite a 14%YoY fall in OPEX, the sharp increase in cost of sales meant that EBIT fell 30%YoY to N7.11 billion. Higher finance costs led net finance expense higher by 67%YoY which in turn helped bring PB...
In the summer of 2015, I met Prof. Ed Altman at a lecture in New York. He devised the Altman Z-score in 1968 and first published his formula 50 years ago, after doggedly sifting through thousands of pages of annual reports to obtain the data for his analysis. The Altman Z-score became the gold standard for bankruptcy analysis. The Altman Z-score is a formula for determining whether a company is headed for bankruptcy. It takes into account profitability, leverage, liquidity, solvency, and acti...
Nigerian Breweries' (NB) Q3'19 revenue (before excise tax) grew 2.6% y/y due to low, single-digit volume growth. However, a 31% increase in excise duty expense resulted in net producer revenue (NPR) remaining flat y/y. Positively, cost of goods sold (COS) declined 12.4% y/y, resulting in a GP margin expansion of 9pp. Despite an improvement in operating profit, NB has been forced to increase marketing and distribution spend (+14.3% y/y) to try rebuild brand equity and stem the loss of market s...
Nigerian Breweries recorded a net loss of NGN1.0bn in Q3 19, 71% below the loss in Q3 18. The key driver of the improved earnings performance was a 14% reduction in the cost of sales due to lower expense on raw materials and consumables. Another positive was the 3% yoy increase in gross revenues, which indicates sustained volume growth as prices were broadly unchanged. That said, the results were below expectation and weighed by: 1) a 31% yoy jump in excise duties as a second hike was implemente...
Sector valuation is now closer to fair value. Our coverage of Nigerian consumers stocks is down 21% ytd on aggregate, and currently trades at a median FY 20f PE and EV/EBITDA of 22.8x and 10.3x, respectively (average 30% discount to the 2-year historical median). In our view, the sector historically traded at unjustifiably rich multiples, and is now closer to our fair value estimates (FY 19f PE and EV/EBITDA of 23.9x and 7.9x), hence our broadly neutral stance, despite cuts to our target prices....
At least 40 banks attended a ‘beauty parade’ in Saudi Arabia in the last few days for the IPO. What the bankers may not be aware of is that they are about to herald a boom – there are strong signs that the five-year bear market in commodities could reverse dramatically with this move:
Nigerian Breweries (NB) revenue fell by 1% for the six-month period ending June 2019 (Avior: +1% y/y). The Group's revenue declined for the third consecutive six-month period. We believe muted volume growth, together with a 17% excise increase resulted in the revenue decline. IntBrew's aggressive pricing strategy, done to gain market share (c.25% share of the market), forced NB to maintain prices. As a result, NB had to absorb input cost inflation and an excise increase, impacting operating ...
Nigeria H2'19 Outlook - Feeble feet on thorny grounds Narrow opportunity window amid easing global monetary conditions: A sense of urgency is required for Nigeria to derive optimal benefits from the sudden increase in global liquidity conditions occasioned by the switch to accommodative monetary policy by central banks in developed markets. IMF projections indicate, that global GDP growth could ease to 3.3% for FY’19 due to weaker growth in the...
We are bullish on the Africa Consumer sector and identify Nigerian Breweries (NB NL), Nestle Nigeria (NESTLE NL), and East African Breweries (EABL KN) as our top picks. In this report we introduce a proprietary valuation metric, Productive Exposure to the Poor (PEP), that rates companies based on the extent to which their business model targets Africa’s poorer segments. We also focus on Nigeria and provide individual company analysis of the eight Nigerian Consumer names in our coverage.
We had a discussion with management about the operating environment and outlook for the year. Management remains optimistic on performance, and overall the meeting reinforced our view that the stock is currently good value and better times lie ahead. We present our key findings in the report.
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