International Breweries Plc has reported a pre-tax loss of N61.81 billion for the second quarter of 2024. This marks a slight improvement compared to the N89.35 billion pre-tax loss recorded in the first quarter of the year.
However, the company’s losses have worsened since the corresponding quarter of the previous year when it recorded a pre-tax loss of N37.31 billion.
For the first half of 2024, International Breweries Plc’s pre-tax losses amounted to N150.23 billion, a 262.6% increase from the N41.43 billion recorded in the first six months of 2023.
Key Financial Highlights:
– Revenue: N119.98 billion, up from N61.73 billion in Q2 2023.
– Cost of Sales: N86.22 billion, up from N41.29 billion in Q2 2023.
– Gross Profit: N33.76 billion, up from N20.44 billion in Q2 2023.
– Administrative and Distribution Expenses: N27.23 billion, up from N18.78 billion in Q2 2023.
– Finance Income: N1.79 billion, down from N2.99 billion in Q2 2023.
– Net Finance Cost: N21.90 billion, up from N5.59 billion in Q2 2023.
– Loss Before Tax: N61.81 billion, up from N37.31 billion in Q2 2023.
– Tax Credit: N14.48 billion, down from N16.02 billion in Q2 2023.
– Loss for the Period: N47.32 billion, up from N21.28 billion in Q2 2023.
– Basic Earnings Per Share (EPS): (N1.79k), up from (N0.79k) in Q2 2023.
Despite a significant increase in revenue, the company continued to struggle with high finance costs, administrative expenses, raw materials, and overhead costs. Raw materials and overhead costs surged by 95.51% from N38.11 billion in Q2 2023 to N74.87 billion in the current period.
Notably, International Breweries recorded a realised foreign exchange loss of N82.62 billion in Q2 2024, a stark contrast to the realised foreign exchange gain of N7.97 billion in the same period last year. Additionally, the company saw an unrealized gain of N33.06 billion in Q2 2024, compared to an unrealized foreign exchange loss of N41.88 billion in Q2 2023.
The company’s finance income declined by 67% year-on-year to N1.79 billion, while interest payments on borrowings surged by 195.4% from N7.52 billion in Q2 2023 to N22.22 billion in Q2 2024. Interest on overdraft facilities from various banks is payable at rates ranging from 25% to 30%.
International Breweries also noted that it settled a $424 million loan obtained from Citi Bank in 2018, which had an outstanding balance of $342 million as of March 2024.
“The overdraft facilities from various banks are all secured by a corporate guarantee from the Company. Interest on the bank overdrafts is payable at rates ranging from 25% to 30%,” the company stated.
The financial struggles of International Breweries highlight the ongoing challenges faced by the company despite increased revenue.
