Hans Essaadi, the CEO of Nigerian Breweries Plc, expressed concerns about the challenging economic conditions in Nigeria impacting beer sales.
He highlighted this during the company’s investor call on February 19, following the release of the 2023 results.
He said, “It has been unprecedented year for our business in Nigeria. We saw a significant decline in the mainstream lager market as a result of Nigerian consumers no longer able to afford a Goldberg after a hard day’s work,” Essaadi told Bloomberg.
The devaluation of the naira led Nigerian Breweries to suffer a foreign exchange loss of N153bn for the year ending December 2023.
Despite growing revenue by 8.9% to N599.64bn from N550.64bn, the company experienced a significant increase in net finance expenses, resulting in a loss of N106.31bn compared to a gain of N13.19bn in 2022.
In comments reacting to the financial results, the NB Board of Directors said;
“The Nigeria business landscape experienced significant shifts in 2023 with substantial impact on businesses and livelihoods nationwide. The redesign of the naira notes which resulted in cash shortage that severely hampered social and economic activitIies nationwide set the tone for a turbulent year.
“High double-digit inflation rates (with food inflation at more than 30 per cent), removal of subsidy on premium motor spirit (fuel), devaluation of the naira, and foreign exchange scarcity further exacerbated the already difficult environment for the populace and businesses.”
“The company was able to grow its revenue by nine per cent compared to the previous year aided by a positive price mix. However, the operating profit fell by 15 per cent due to higher input cost and one-off reorganisation costs despite strong and aggressive cost savings and other efficiency measures. Coupled with the impact of the devaluation of the naira which resulted in a foreign exchange loss of N153bn, the Company recorded a net loss of N106 billion during the year.”
Nigerian Breweries produces popular alcoholic beverages like Star Lager, Gulder, Legend Extra Stout, Heineken, Goldberg, Life, and Star Radler. In response to rising input costs, the company raised prices in August.