NB

Nigerian Breweries shares rally more than 45% in 4 days

Nigerian Breweries Plc is adding value to the market capitalisation as brewer share price gained 45.72% in the last 5 days trading session.

The stock had traded at ₦22.70 in the first trading day last week but closed at ₦32.50 on Friday.

Equities segment of the Nigerian Stock Exchange had sustained its bullish performance in the week amid rising cases of COVID-19 pandemics.

This, however, did not impact the stock market compare to previous week due to sell-offs in bellwether stocks.

Year to date, the company stock had lost more than 49% of its opening value, data obtained from Cashcraft portal shows.  

NB Plc which is expected to be hurt by economic lockdown issued series 7 and 8 commercial paper for subscription in April.

The brewer cited the need to improve working capital as it issued the series from its commercial paper programme.

Investors currently value NB at ₦258.699 billion on 7,996,902,051 shares outstanding.

NB is a leading Nigerian beer producer.  Its products are organised around two families of products.

In the beer line, there is Star, Gulder, Legend, Heineken and Amstel Malta brands. Its non-alcoholic malt beverages: Fayrouz and Maltina brands.

Financials

NB sales in 2019 was ₦323 billion. The sales fell below ₦324.4 billion worth of beer and non-alcoholics products sold to customers in 2018.

In line with lower activities, its cost of sales went south by 2.9%. The company cost of sales in 2018 was ₦197.5 billion but it dropped to about ₦192 billion.

But operating expenses rose 6.8% from ₦90.8 billion to ₦97.1 billion despite the fact that activities level declined.

However, rate of change in operating expenses was below average inflation rate of 11.4% in 2019.

Unfortunately, due to high cost of financing its capital structure and short term working capital, net finance cost jerked up by more than 57%.

Net finance cost increased to ₦11.9 billion from ₦7.5 billion in 2018. This impacted pre-tax profit negative.

Debt as proportion of equity in the company increased to 33.2% as against 25.5% in the comparable period.

The brewer significantly raise total borrowing to ₦55.7 billion. This represents 30.8% when compare with ₦42.6 billion reported in 2018.

The brewer’s profit before tax slipped more than 20% from ₦29.4 billion in 2018 to ₦23.4 billion in 2019.

After NB Plc. adjusted for taxes, profit for the year berthed at ₦16.1 billion as against ₦19.4 billion in 2018.

The balance sheet size of the company shrink 1.4%, total assets dropped from ₦388.3 billion to ₦382.8 billion.

However, NB’s liabilities dropped faster at 2.9% from ₦221.4 billion to ₦215 billion in the period.

Analysts’ expect the brewer’s numbers to drop weaker than initially anticipated in 2020.

Nigerian Breweries shares rally more than 46% in 4 days