BY FESTIS OKOROMADU
The Board of Directors of Nigerian Breweries Plc has proposed a dividend pay-out of N1.43 per ordinary share of 50 kobo each for its financial year ended December 31, 2022. The proposal which is contained in the statement signed by the Company Secretary, Uaboi G. Agbebaku, and backed by an Order of the Board followed the declaration of a total dividend of N13,872,778,710 for the year.
Traditionally, the brewing giant had earlier in October 2022 distributed an interim dividend of N3, 288,362,361 which translated to 40 kobo per share. Consequently, a final dividend of N10, 584,416,349 translating to N1.03 per share is being proposed by the Board for the company’s annual general meeting scheduled for late April.
As usual, the proposed final dividend will be subject to deduction of withholding tax at the appropriate rates once it is approved by the shareholders. The company further disclosed that the final dividend will become payable on April 26, 2023, to shareholders whose names appear on the Company’s Register of Members at the close of business on Thursday, March 16, 2023.
To this end the register will be closed from Friday, March 17, 2023 to Thursday, March 23, 2023 (both dates inclusive) for the purpose of updating the Register. Meanwhile, an analysis of the company’s full year financial report for the year ended December 31, 2022, shows that the net revenue grew by 25.92 percent to N550.638 billion from N437.285 billion in the corresponding period of 2021.
The growth is said to have been driven by brand mix improvements and strong pricing. Attributing the performance to resilience in the face of a challenging economy, the brewing giant said that “the total market decreased by high single-digit reflecting pressure on consumer disposable income as well as naira devaluation and inflation. Nevertheless, we outperformed the market led by our strong premium portfolio.”
“OUR PROFIT AFTER TAX MARGIN REDUCED, DRIVEN MAINLY BY THE INCREASE IN FOREIGN EXCHANGE LOSSES DUE TO THE NAIRA DEVALUATION AND FOREIGN CURRENCY SCARCITY. DESPITE THE NET MARGIN DECREASE, THE COMPANY GREW ITS PROFIT AFTER TAX BY 8%”
During the year under review, Nigerian Breweries Plc said that the cost of sales, marketing, and distribution expenses were under pressure due mainly to inflation, devaluation of the naira and high energy prices.
Thus, the cost of sales which includes marketing and distribution stood at N337.310 billion as against N276.872 billion reported in the corresponding period of 2021. While the operating margin was flat, leading the post of N51.765 billion as profit from operating activities for the 2022 financial year as against N41.494 billion of the previous year or 24.73 percent increase, profit after tax was not that fortunate. Operating expenses remained elevated (+31.6% y/y) in 2022FY (2021FY: +37.4% y/y) with marketing-related costs accounting for 82.8 percent of the total OPEX. Analysts attribute this persistent increase in operating expenses mainly to the challenging operating environment in Nigeria, and the brewer’s continuous focus on increasing brand visibility.
As a result, the group’s EBIT (-9bps) and EBITDA (-234bps) margins declined to 9.4 percent and 16.6 percent, respectively, in 2022FY. Net finance charges grew by 93.4 percent y/y to N34.42 billion, on the back of higher FX losses (+274.1% y/y) due to exposure from its foreign currency-denominated payables amid a 23.9 percent y/y decline in finance cost. The Group’s PAT margin contrasted drastically as it grew by mere 4.06 percent to N13.186 billion from N12.671 billion in the corresponding period of 2021 due to high cost of funds.
“Our Profit after Tax margin reduced, driven mainly by the increase in foreign exchange losses due to the naira devaluation and foreign currency scarcity. Despite the net margin decrease, the company grew its Profit after Tax by 8%,” the Board stated. In October 2022, Nigerian Breweries Plc had announced an interim dividend of 40 kobo per ordinary share of 50 kobo each, subject to the deduction of the appropriate w i t h h o l d i n g tax for the nine months period ended September 30, 2022.
The qualification date for the dividend was November 23, 2022. The dividend which amounted to N3,288,362,361 was paid on December 1, 2022, electronically to shareholders whose names appeared on the Register of Members as at November 23, 2022, and who had completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their bank accounts.