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Tough operating environment may continue, says NB

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tough-operating-environment-may-continue,-says-nb

By Taofik Salako, Deputy Group Business Editor

Nigerian operating environment will remain challenging in the meantime with rising inflation and declining consumer purchasing power expected to impact corporate performance.

Speaking during a virtual presentation at the Nigerian Stock Exchange (NSE), Managing Director, Nigerian Breweries (NB) Plc, Mr. Jordi Borrut Bel said the performance of the company was adversely affected by COVID-19 pandemic and tough macroeconomic conditions.

According to him, the 2020 performance of Nigerian Breweries was adversely impacted by the COVID-19 pandemic, value added tax (VAT) increase, foreign exchange devaluation and scarcity of foreign exchange.

He said the company’s position in the market enabled it to mitigate the impact in the third quarter, noting that the company will strive to sustain the performance of the second half of 2020 by continuing to drive premiumisation and growth.

“However, we still expect to have a challenging operating environment with devaluation, inflation and affordability. The capabilities of our people, focus on our consumers combined with a commercial agility and position for growth gives us confidence to continue to winning with Nigeria,” Bel said.

Divisional Head, Listings Business, Nigerian Stock Exchange (NSE), Mr. Olumide Bolumole praised the efforts made by the board and management of Nigerian Breweries towards achieving business continuity by enhancing the organisation’s operational efficiency.

He also lauded the decision of the company to use the NSE Facts Behind the Figures event to provide the market with information about its financial performance as well as strategic and operational developments.

“Given that the market is driven by timely, relevant and accurate information, this interaction with the market through this forum is vital and we encourage the management of Nigerian Breweries to continue to strive for sustainability by adhering to the highest standards of disclosure and corporate governance,” Bolumole said.

He added that the Exchange has continued to position itself as the African Exchange of choice for companies and investors by implementing policies aimed at strengthening the corporate governance of listed companies.

According to him, leveraging its various digital platforms and innovative technology to ensure business continuity and uninterrupted dissemination of information to the market, NSE has also showed its remarkable resilience by providing a platform to support listed companies in meeting their strategic business objectives.

Nigerian Breweries earmarked about N1.9 billion as interim cash dividend to shareholders after the company posted net profit of N7.05 billion in third quarter. This represents a dividend per share of 25 kobo.

According to the unaudited and provisional results filed at the NSE, NB saw 0.7 per cent decline in revenue from N235.7 billion in September 2019 to N234 billion in September 2020. The company attributed the marginal decline to factors such as increase in Excise Duty, rising inflation, increase in value-added tax ( VAT) from 5.0 per cent to 7.5 per cent as well as the impact of the COVID-19 on most businesses across the world.

In a statement signed by the Company Secretary and Legal Director, Nigerian Breweries Plc, Mr. Uaboi Agbebaku, the company reassured that it would continue to focus on efforts to mitigate the impact of the pandemic on its operations, while protecting the health, safety and welfare of employees, customers and partners.

The statement noted that the interim dividend will become payable on Tuesday, December 1, 2020 to all shareholders registered in the books of the company as at Friday, November 20, 2020.

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