By Olayemi Esan
In its 9-month of financial year result, Nigerian Breweries Plc.’s profit after tax went south by 43.5% from ₦12.275 billion to ₦6.940 billion.
Despite this disappointing profit, analysts said the brewer’s third quarter result indicates that strong recovery may be underway.
To maintain its dividend policy, NB announced an interim dividend of 25 kobo per share, which will be paid electronically in December 1, 2020.
But data shows that NB Plc share movement has largely under-performed year to date return in the stock market.
Detail of the unaudited result showed that NB’s net revenue slipped 0.7% from ₦235.659 billion in 9M-2019 to ₦234.039 billion a year after.
Though the company delivered strong earnings recovery in Q3-2020 due to global easing of economic lockdowns.
In Q3, NB Plc net revenue rose about 20% from ₦68.652 billion in Q2 to ₦82.229 billion, the performance which indicate a strong recovery to pre-pandemic level.
So, profit after tax expanded 1,508% from ₦84 million in Q2-2020 to ₦1.35 billion in Q3-2020.
Analysts see this as possible recovery around demand for company’s products, though there was a marginal drop in net revenue in 9M-2020.
Basically, NB Plc has been faced with lower demand as a result of COVID-19 restriction.
In its equity note, CSL Stockbrokers also alluded to removal of covid-19 restrictions on gatherings and re-opening of on-trade channels (clubs, bars etc.) t o have helped the results.
Analysts at CSL Stockbrokers said traditionally Q3 results has always been a weak period for sales for the company.
In its estimate, CSL Stockbrokers said NB Plc annualised 9M-2020 revenue is ahead of its 2020 projection of ₦277.5 billion.
But then, the firm saw cost of sales (adjusted for depreciation) expanded faster than revenue, up 1.6% to ₦125.0 billion from ₦123.1 billion in 9M-2019.