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NB Positions Introduction
- By Kayode Ogunwale
- Published May 17th, 2010
- StockWorld
- Unrated
NIGERIAN Breweries Plc, incorporated in 1946, is the pioneer and largest brewing company in Nigeria. Its first bottle of beer, star Lager, rolled off the bottling lines of its Lagos brewery in June 1949. Other breweries were subsequently commissioned by the company, including Aba brewery in 1957, Kaduna brewery in 1963, and Ibadan brewery in 1982. In September 1993, the company acquired its fifth brewery in Enugu State, and in October 2003, its sixth brewery, sited at Ama in Enugu. Ama brewery is the largest brewery in Nigeria and one of the most modern worldwide. Operations at Enugu brewery were discontinued in 2004, leaving the company with five operational breweries.
The company has a portfolio of high-quality brands, including star lager beer (launched in 1949); Gulder lager beer (1970); Maltina (1976), which now has three varieties, namely Maltina classic, Maltina strawberry, and Maltina with pineapple; Maltina Sip-it (2005), which was packaged in tetrapaks; Legend extra stout (1992); and Amstel malta (1994). The company also re-launched Heineken lager into the Nigerian market in June 1998. Nigerian breweries operates many related companies, including beverage-related manufacturing companies making corks, labels, bottles, packing crates; and a logistics network, including transport companies, warehousing companies and retail sales management NB Plc involved in the brewing, marketing and selling of alcoholic and
non-alcoholic beverages (larger stout, malt and soft drink), the company was listed on the official list of the Nigerian Stock Exchange (NSE) under the breweries sub-sector in 5th of September, 1973.
Management
Chief Kola Jamodu is the chairman of the company, Mr. Paul Hamers MFR who was one time MD/CEO of the company is the interim managing director and chief executive officer of the company; he took over from Mr. Michiel Herkemij who has been given another assignment by Heineken N.V. moving on to head the new business acquired by Heineken N.V. in Mexico. Mr. Tom de Man, Mr. Atedo Peterside OON, Mr. Ishmael Yamson, Mrs. Nenadi Usman ands Mr. Olusegun Adebanji are the non executive director of the company. Other directors are Mr. Victor Famuyibo, Mr. Laurent Couedic, Dr. Oladele Ajayi, Mr. Uaboi Agbeku, Mr. Jan van der Linden and Mr. Evert van Willegen.
Financing Structure
The authorized share capital of Nigerian Breweries Plc is 8 billion ordinary shares of 50 kobo each worth N4 billion, while its issued and fully paid up capital stands at 7.56 billion ordinary shares of 50 kobo valued at N3.78 billion as at the end of its financial year ended may 31, 2009. Its shareholders’ fund grew during its 2009 financial year by N14.341 billion or 44.5 per cent. From N32.229 billion the company’s shareholders’ fund rose to N46.570 billion at the end of its 2009 financial year. Fixed assets went up by N5.445 billion or 8.6 per cent to stand at N69.003 billion in 2009 from N63.558 billion which it had at the end of its 2008 financial year. The current assets also went up from N20.741 billion in 2008 to N22.065 billion at the end of 2009 financial year. This is a N1.323 billion or 6.4 per cent rise in its current assets. Total assets less current liabilities rose by N15.032 billion or 30 per cent during the year under review. From the value of N49.637 billion in 2008 it rose to N64.669 billion in 2009.
Profitability
Turnover of the Nigerian Breweries rose from N145.462 billion in 2008 to N164.297 billion representing an increase of N118.745 billion or 12.9 per cent. Cost of sales of the company rose from N74.562 billion in 2008 to N88.734 billion in 2009. This is an increase of N14.172 billion or 19 per cent. It made N75.472 billion gross profit in the review period of 2009 as against N70.899 billion in 2008, which is N4.573 billion or 6.4 per cent growth. Nigerian Breweries spent N13.160 billion on administrative expenses during its 2009 financial year. This shows a 3.04 per cent rise when compared to N12.772 billion which it spent for the same purpose in 2008. Operating profit went up by 13.3 per cent to N41.662 billion in 2009 financial year from N36.778 billion in 2008. Profit before taxation went up by N3.881 billion or 10 per cent during the review period from N37.519 billion in 2008 to N41.399 billion in 2009. Taxation went up by 14 per cent reducing the percentage increase in profit after tax. Profit after tax was shoot-up by N2.209 billion or 9 per cent in 2009 as against N25.701 billion in 2008, it made N27.701 billion in 2009.
Liquidity
Current ratio in 2008 was 0.7:1. Current assets of the company can only take care of 70 per cent of its current liabilities. In 2009, the situation was better. It was 0.9:1. As its current assets can only take care of 90 per cent of its current liabilities. The situation presented a decline if its inventory is taking out of the assets. In 2008, it came down to 0.4:1. Its current assets minus stock could only provide for take care of only 40 per cent of its liabilities. In 2009, it remains the same.
Future Outlook
From all indications, the year 2010 will not be less challenging for businesses than the previous year, 2009. Access to credit facilities remains a major challenge. Security of lives and property remain a concern especially in the run up to election campaigns for the general election in 2011. However, the federal government has indicated interest in reforming the electoral process which will ensure a peaceful election. A peaceful environment is a pre-requisite for business survival and success.
Analysts Opinion
The company grew its turnover by 13 per cent only for its gross profit to rise by 6.4 per cent. In 2009, cost of sales gulped 2 per cent of the turnover for the year the same in 2008. The company had earlier paid two interim dividends which were declared in May, 2009 and January, 2010 in the sum of N21.175 billion i.e. N2.8 kobo per ordinary share of fifty kobo each and the final dividend will be N6.731 billion.
The company has a portfolio of high-quality brands, including star lager beer (launched in 1949); Gulder lager beer (1970); Maltina (1976), which now has three varieties, namely Maltina classic, Maltina strawberry, and Maltina with pineapple; Maltina Sip-it (2005), which was packaged in tetrapaks; Legend extra stout (1992); and Amstel malta (1994). The company also re-launched Heineken lager into the Nigerian market in June 1998. Nigerian breweries operates many related companies, including beverage-related manufacturing companies making corks, labels, bottles, packing crates; and a logistics network, including transport companies, warehousing companies and retail sales management NB Plc involved in the brewing, marketing and selling of alcoholic and
non-alcoholic beverages (larger stout, malt and soft drink), the company was listed on the official list of the Nigerian Stock Exchange (NSE) under the breweries sub-sector in 5th of September, 1973.
Management
Chief Kola Jamodu is the chairman of the company, Mr. Paul Hamers MFR who was one time MD/CEO of the company is the interim managing director and chief executive officer of the company; he took over from Mr. Michiel Herkemij who has been given another assignment by Heineken N.V. moving on to head the new business acquired by Heineken N.V. in Mexico. Mr. Tom de Man, Mr. Atedo Peterside OON, Mr. Ishmael Yamson, Mrs. Nenadi Usman ands Mr. Olusegun Adebanji are the non executive director of the company. Other directors are Mr. Victor Famuyibo, Mr. Laurent Couedic, Dr. Oladele Ajayi, Mr. Uaboi Agbeku, Mr. Jan van der Linden and Mr. Evert van Willegen.
Financing Structure
The authorized share capital of Nigerian Breweries Plc is 8 billion ordinary shares of 50 kobo each worth N4 billion, while its issued and fully paid up capital stands at 7.56 billion ordinary shares of 50 kobo valued at N3.78 billion as at the end of its financial year ended may 31, 2009. Its shareholders’ fund grew during its 2009 financial year by N14.341 billion or 44.5 per cent. From N32.229 billion the company’s shareholders’ fund rose to N46.570 billion at the end of its 2009 financial year. Fixed assets went up by N5.445 billion or 8.6 per cent to stand at N69.003 billion in 2009 from N63.558 billion which it had at the end of its 2008 financial year. The current assets also went up from N20.741 billion in 2008 to N22.065 billion at the end of 2009 financial year. This is a N1.323 billion or 6.4 per cent rise in its current assets. Total assets less current liabilities rose by N15.032 billion or 30 per cent during the year under review. From the value of N49.637 billion in 2008 it rose to N64.669 billion in 2009.
Profitability
Turnover of the Nigerian Breweries rose from N145.462 billion in 2008 to N164.297 billion representing an increase of N118.745 billion or 12.9 per cent. Cost of sales of the company rose from N74.562 billion in 2008 to N88.734 billion in 2009. This is an increase of N14.172 billion or 19 per cent. It made N75.472 billion gross profit in the review period of 2009 as against N70.899 billion in 2008, which is N4.573 billion or 6.4 per cent growth. Nigerian Breweries spent N13.160 billion on administrative expenses during its 2009 financial year. This shows a 3.04 per cent rise when compared to N12.772 billion which it spent for the same purpose in 2008. Operating profit went up by 13.3 per cent to N41.662 billion in 2009 financial year from N36.778 billion in 2008. Profit before taxation went up by N3.881 billion or 10 per cent during the review period from N37.519 billion in 2008 to N41.399 billion in 2009. Taxation went up by 14 per cent reducing the percentage increase in profit after tax. Profit after tax was shoot-up by N2.209 billion or 9 per cent in 2009 as against N25.701 billion in 2008, it made N27.701 billion in 2009.
Liquidity
Current ratio in 2008 was 0.7:1. Current assets of the company can only take care of 70 per cent of its current liabilities. In 2009, the situation was better. It was 0.9:1. As its current assets can only take care of 90 per cent of its current liabilities. The situation presented a decline if its inventory is taking out of the assets. In 2008, it came down to 0.4:1. Its current assets minus stock could only provide for take care of only 40 per cent of its liabilities. In 2009, it remains the same.
Future Outlook
From all indications, the year 2010 will not be less challenging for businesses than the previous year, 2009. Access to credit facilities remains a major challenge. Security of lives and property remain a concern especially in the run up to election campaigns for the general election in 2011. However, the federal government has indicated interest in reforming the electoral process which will ensure a peaceful election. A peaceful environment is a pre-requisite for business survival and success.
Analysts Opinion
The company grew its turnover by 13 per cent only for its gross profit to rise by 6.4 per cent. In 2009, cost of sales gulped 2 per cent of the turnover for the year the same in 2008. The company had earlier paid two interim dividends which were declared in May, 2009 and January, 2010 in the sum of N21.175 billion i.e. N2.8 kobo per ordinary share of fifty kobo each and the final dividend will be N6.731 billion.
