In its recently released earnings results, despite favourable pricing, International Breweries reported only a 6% rise in Revenue, which when compared to the 36% y/y average growth seen in H1 showed the heavy impact of excise duties on the company’s topline. However, cost of sales grew by 14% y/y to ₦38.7 billion, dragging gross profit 18% lower y/y to ₦12.6 billion and gross margin 6ppts and 10ppts lower to 21% from 27% in Q3’21 and 31% in Q2’22. Even though operating expense remained sta...
In its recent H1’22 Earnings results, International Breweries PLC showed a 25% y/y rise in Q2’22 Revenue to ₦53.9 billion. We believe that the growth was spurred by industry-wide increase in prices, especially in the Malt and Lager segments, and given Trophy’s market leadership in the Lager space, we consider this the headliner for the company’s Revenue growth. However, volumes came in lower q/q, as Revenue declined by 6% in the period. This highlights the tradeoff consumers are increasing...
International Breweries PLC released its Q1’22 financial statements, where it reported a sizable 48% y/y growth in topline as well as a PAT of ₦0.7 billion (its second quarterly profit since the consolidation) from a loss of ₦2.5 billion the previous year. The impressive PAT performance was underpinned by significant growth in margin, as well as increased reported finance income.Like its counterparts in the brewery industry, International Breweries in the past two quarters raised prices ac...
A director at International Breweries bought 8,346,021 shares at 5.000NGN and the significance rating of the trade was 58/100. 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 y...
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....
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...
We assign a Sell with a TP of NGN11.20, implying an ETR of -11%, as we update our forecasts and valuation to incorporate a tougher operating backdrop and the impact of the planned NGN165bn rights issue. While we consider the rights issue to be positive for earnings once concluded, we also see significant ownership dilution for current shareholders of about 68%.
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....
International Breweries reported net losses in FY 18 and Q1 19. The consolidated group (incorporating Intbrew, Pabod and Intafact) made a net loss of NGN4.0bn in Q1 19, which was 78% higher than in Q1 18. This followed a net loss of NGN3.9bn in FY 18 (also for the consolidated entity), which fell below our forecast of NGN2.8bn loss. The results were weighed by significant cost pressure, which offset higher revenues, particularly in Q1 19 when there was a 35% yoy jump. In FY 17, the company recor...
International Breweries (IntBrew) released a disappointing set of FY'18 results, despite exceeding our earnings expectations (EPS of -NGN0.45 versus -NGN0.53 Avior estimate). Due to various acquisitions and capital projects, the Group's debt has increased to NGN217bn (FY'17: NGN88bn) resulting in a net debt/EBITDA ratio of 8.1x (net debt/EBIT of 25x). We do not believe the current gearing levels are sustainable. Thus, we forecast negative earnings over the next three years due to excessive in...
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.
The beer industry across Africa has been under strain over the past two years, as political and economic headwinds continued to hamper consumer spending. Brewers across the continent experienced margin contraction following a period of consumer downtrading. Following an economic turnaround, we expect consumption across the continent to grow at a CAGR of 4.5% over the next ten years, with East Africa our favoured region.
International Breweries reported its FY17 (9M ending Dec) earnings results last week, posting EPS of NGN0.36, +15% yoy based on a weighted number of shares for the period. This implies Q3 17 EPS of NGN0.25, -42% yoy also based on weighted shares during the period. The company also announced that it will not be declaring a dividend for the period, a repeat of the previous year due to weak earnings and high debt levels.
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
​Relatively good Q3; Neutral rating maintained Neutral rating maintained despite raising earnings forecasts: Following International Breweries’ Q3 2016 (end-Dec) results which surprised positively, we have increased our earnings forecasts by 27% on average for the 2016-17E period. However, we have increased our price target by a wider margin of 47% to N21.0 mainly because of our decision to roll over our DCF valuation to 2017. From current levels, International Breweries shares are trading o...
​Challenging macro weighing on performance Modest cuts to our earnings forecasts: Following International Breweries' Q2 2016 results which surprised negatively, we have cut our earnings forecasts by 10% on average for the 2016-17E period. However, we have trimmed our price target by a slimmer margin of 2% mainly because we have reduced our risk free rate assumption by 250bps to 13%. We increased our capital expenditure forecasts for the next two years on the back of the company's plans to reac...
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