Monday, 17 February 2025 04:51

Naira depreciation pushes Nigerian Breweries into highest annual loss ever

Rate this item
(0 votes)

The local unit of Heineken NVNigerian Breweries, continued its FX-induced lossmaking for the second year last year as the manufacturer posted N144.9 billion in net loss after a devaluation of the naira last January caused its reporting currency to slump substantially.

It recorded the negative bottom line even though sales improved by 80.8 per cent, taking revenue to a new milestone of N1.1 trillion, according to its audited accounts issued on Friday.

The direct cost of production for the beer and non-alcoholic beverages maker rose to 70.5 per cent of turnover from 64.5 per cent as the cost of imported raw materials eroded revenue.

CEO Hans Essaadi said in April 2023 that imports accounted for almost half of Nigerian Breweries’ input costs, leaving it at the mercy of exchange rate swings.

The spending on raw materials and consumables more than doubled to N615.5 billion during the review period, underscoring the gravity of FX pressures.

“Foreign exchange volatility and limited access to foreign capital created additional hurdles for businesses, while the lingering effects of the fuel subsidy removal and Naira devaluation significantly increased operating costs across industries,” the company stated in its earnings release.

The consumer goods giant said it used the proceeds of its last year’s rights issue to “significantly reduce future currency risks.”

Naira, its reporting currency, saw one of its worst outings in years last year when it shed roughly 41 per cent of its value, complicating matters for import-dependent businesses already grappling with sky-high price levels.

Net loss on foreign exchange transactions stood at N157.6 billion, 2.8 per cent higher than a year ago.

But the reverberations of its foreign exchange woes even went far beyond its base Nigeria.

“Net revenue (beia) was dampened by a negative translation impact of €1,656 million, or 5.5%, mainly due to the devaluation of the Nigerian Naira, and depreciation of the Brazilian Real and Mexican Peso,” the parent Heineken remarked in its own financial report issued on Wednesday.

Heineken acknowledged Nigeria as one of the markets that drove a 1.6 per cent increase in its beer volume globally last year.

Net finance costs stood at N252.8 billion, up from N189.2 billion a year ago. Loss before tax went higher by one-fifth to N182.9 billion.

Last June, Nigerian Breweries announced the acquisition of an 80 per cent stake in Distell Nigeria, helping it branch out into the manufacturing of wines and spirits.

 

PT

March 18, 2025

While Nigeria hikes ship berthing charges to $200,000, in Ghana it’s $15,000, Shanghai $21,000, Cotonou…

Following the recent 15 per cent increase by the Nigerian Ports Authority (NPA) in port…
March 16, 2025

El-Rufai speaks further on Tinubu’s presidency, Chicago scandal, other issues

Former Kaduna State Governor Nasir El-Rufai has revealed that he and other political leaders were…
March 17, 2025

7 so-called ‘status symbols’ that only impress the middle class

Isabella Chase Picture this – you’re in a room full of people, and someone walks…
March 01, 2025

Man offers to split $525,000 jackpot with thieves who stole his credit card to buy…

A Frenchman appealed to the homeless thieves who stole his credit card to buy a…
March 14, 2025

Gunmen invade Kaduna communities, abduct 10

Suspected bandits have abducted ten villagers from three remote communities in Kajuru Local Government Area…
March 18, 2025

Here’s the latest as Israel-Hamas war enters Day 529

Ceasefire over as Israel strikes Gaza after Hamas refused to release hostages, officials say The…
March 15, 2025

Humanoid robot with human-like competence unveiled in China

Du Qiongfang Humanoid robot manufacturer AgiBot in Shanghai unveiled on Tuesday its latest humanoid robot…
January 08, 2025

NFF appoints new Super Eagles head coach

The Nigeria Football Federation (NFF) has appointed Éric Sékou Chelle as the new Head Coach…

NEWSSCROLL TEAM: 'Sina Kawonise: Publisher/Editor-in-Chief; Prof Wale Are Olaitan: Editorial Consultant; Femi Kawonise: Head, Production & Administration; Afolabi Ajibola: IT Manager;
Contact Us: [email protected] Tel/WhatsApp: +234 811 395 4049

Copyright © 2015 - 2025 NewsScroll. All rights reserved.