Fakoyejo OlalekanIn three months, Nigerians consumed over N233.87 billion worth of alcoholic and non-alcoholic drinks produced by Nigerian Breweries, Guinness, International Breweries and Champion Brew.
The amount spent on drinks increased 14.13 per cent year-on-year, considering that the companies had generated N196.16 billion in Q3 last year.
Nigerian Breweries, Guinness, International Breweries and Champion Brew spent N158.52 billion to produce the brands consumed between July to September 2022. Prime Business Africa learnt the cost of producing these drinks rose by 18.16 per cent when compared to the N134.16 billion expended to get the bottles, plastics and cans to the market in third quarter 2021.
The rise in cost of production affected the bottom line of industry players, as their combined net profit fell to N6.92 billion in Q3, falling short of the N6.94 billion profit after tax recorded in the same period of 2021.
Breakdown of companies’ performance
The best performing companies in the brewery industry is determined by the revenue growth of each company during each period.
Nigerian Breweries
During the period under review, Nigerian Breweries generated N119.36 billion selling their products. This is a 19.34 per cent year-on-year growth, surpassing the N100.02 billion grossed in Q3 last year.
The revenue growth was on the back of operating expenses growing by as much as 23.98 per cent, as Nigerian Breweries reported the company spent N83.57 billion in Q3 2022, to produce its brands, which was higher than the N67.40 billion disbursed for the same purpose in third quarter last year.
Prime Business Africa gathered the hike in expenses did little to affect Nigerian Breweries’ net profit, with the firm recording N3.98 billion PAT in the third quarter of this year, significantly above the N498.37 million net profit of same period last year.
Champion Breweries
Champion Brew grabbed the second spot on the best performing brewery firm in Q3, recording 17.88 per cent growth in turnover after grossing N2.63 billion between July and September 2022, above the N2.23 billion posted in the corresponding period of 2021.
Similarly, the company’s cost of sales went through the roof, with the management expending N1.67 billion to make its products available in the market. This is 14.60 per cent higher than the N1.45 billion used to produce the drinks last year Q3.
The brewer’s inability to curb the cost of production led to a -3.26 per cent dip in Champion Brew’s net profit, which failed to surpass the N190.10 million recording in Q3 2021, having posted profit after tax of N183.90 million within the three months in review this year.
Guinness
Guinness, which has the second largest market share by revenue, saw its turnover rise by 11.33 per cent to N52.84 billion in the third quarter of 2022, generating more than the N47.46 billion made on sales from its products in the same period last year.
Compared to its industry rivals, Guinness managed to keep its expenses to a single-digit of 7.38 per cent, with production consuming N34.61 billion of the firm’s earnings this year’s Q3, slightly above the N32.23 billion it spent to produce its brands in 2021.
Despite keeping its cost of sales to a minimum level, Guinness management was unable to save the company’s net profit, which fell by -32.03 per cent to N2.74 billion at the end of third quarter, in contrast to the N4.04 billion profit after tax recorded in Q3 of previous year.
International Breweries
Among its market rivals, International Breweries came last after recording the slowest growth in revenue. It generated N49.02 billion in the third quarter of this year. This is 5.59 per cent higher than the N46.43 billion the firm’s products earned in Q3 2021.
The company’s cost of production grew faster than the turnover, with analysis showing International Breweries spent N38.67 billion on ensuring its consumers were not left empty-handed. The expenses grew past the N33.06 billion expended same period last year.
As a result, International Breweries suffered N3.14 billion profit loss between July and September 2022, with the management failing to surpass the N2.21 billion net profit the company grossed in the same period in 2021.
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